UK van production remains strong despite supply chain-constraints

UK commercial vehicle (CV) manufacturing has been described as ‘strong’ despite a 2.9% decline in output in the first six months of the year.

Figures from the Society of Motor Manufacturers and Traders (SMMT) show that 56,956 vans, trucks, taxis, buses and coaches have left factory gates since the start of the year.

Despite the year-on-year decline, wrapped up by a 2.0% drop in output in June as temporary supply chain constraints impacted production, the SMMT says overall levels remain high given last year’s bumper first half and fulfilment of post-Covid delivery backlogs.

Year to date output remains almost a third (31.3%) higher than the pre-pandemic five-year average, thanks to investment in new plants, models and technologies, and robust export demand.

Overseas shipments of UK-built CVs – many of them zero emission – were 3.6% up in the first half at 39,168 units, equivalent to more than two thirds of all output, with the EU taking the lion’s share (97.2%), followed by Australia (1.2%) and the US (0.5%). This growth was, however, unable to offset a 14.8% decline in the domestic market.

Mike Hawes, SMMT chief executive, said: “While a decline in output is always disappointing, some normalisation following the CV sector’s rapid post-pandemic recovery was expected.

“The sector remains in good health with strong global demand for high quality British-built CVs and plants ramping up EV production to meet current and future needs.

“However, the sector will not rest on its laurels and will work with the new government to deliver the favourable industrial, trade and market conditions that are essential if manufacturers are to drive economic growth and decarbonisation in every part of the country.”

Stellantis currently builds its small electric van in the UK and has plans to open a second plant, for medium-sized vehicles, by 2025.

The automotive group’s UK head Maria Grazia Davino said the business will evaluate alternative locations for production if the UK market becomes “hostile”, however.

Commenting on the current ZEV mandate plans, Davino believes the Government needs to do more to stimulate demand for electric vehicles.

The latest independent industry outlook forecasts light CV production to grow to some 110,000 units this year. Volumes are then expected to go above 130,000 in 2030, providing economic and trading conditions allow.