UK CV manufacturing continues recovery

UK commercial vehicle manufacturing grew by 3.6% year-on-year in July, as the sector continues to recover from the effects of the lockdown due to the Covid-19 pandemic, although some uncertainty remains about the future. New figures from the Society of Motor Manufacturers and Traders (SMMT) showed that 5,234 commercial vehicles rolled off production lines in July, compared to 5,054 in July 2019. However, the uptick is in part down to a particularly low month for production in July 2019, when key model changeovers affected factory output.

This recovery followed an increase of 24% in manufacturing in June, although again that figure was boosted by poor production levels in June 2019, which was also due to key model changeovers. Production grew in both the UK and European markets in July. More than half of all units built in July were shipped to Europe, helping to grow overall exports by 4.8%.

Production for the UK also grew as dealers across England, Scotland and Wales were fully open all month – the first full month since February – and could begin to fulfil pent-up demand from customers. Of course, over the year to date output is down significantly – by 21% with 31,655 vans, trucks and buses produced – a combined shortfall of 8,529 units compared to 2019. Both UK and European markets have been affects, with exports faring slightly worse, being 22% down, compared to 20% for the UK market.

However, Mike Hawes, chief executive of the SMMT, while welcoming the increase in output, added that the uncertainty in the market is far from over. “With many production lines running at reduced capacity due to ongoing social distancing measures and order books diminished as a result of depleted business confidence, the industry is still fighting an uphill battle to make up the lockdown loss of more than 8,500 vehicles.

“Already grappling with a pandemic and now a wider economic recession, the automotive industry simply cannot withstand the blow of a no deal Brexit at the end of the transition period.

Protecting the relationship with our key trading partner is crucial for the recovery of our deeply integrated sector, particularly when the majority of CVs currently built in the UK are for the European market.”

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