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UK CV Manufacturing Stays Strong Amid Supply Challenges In First Half Of 2024
UK commercial vehicle (CV) manufacturing saw a 2.9% decline in the first half of 2024, with 56,956 units produced. Despite this drop, production remains significantly higher than pre-pandemic levels. Export demand has been strong, increasing by 3.6% year-to-date, while domestic market production fell by 14.8%. The sector anticipates producing around 111,000 light vans this year.
Exports of UK-built CVs have shown resilience, with a 3.6% rise in the first half of the year, totalling 39,168 units. The European Union accounted for the majority of these exports at 97.2%, followed by Australia at 1.2%, and the US at 0.5%. This robust export performance highlights the global demand for British-built vehicles.
Mike Hawes, SMMT Chief Executive, commented on the situation: "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."
The domestic market faced a significant downturn with a 14.8% decrease in production. This decline contrasts sharply with the robust export performance and highlights challenges within the local market. Despite this, overall production levels remain high due to investments in new plants and technologies.
The latest independent industry outlook predicts that light CV production will reach approximately 110,000 units this year and could exceed 130,000 by 2030 if favourable economic and trading conditions persist.
Sector's Economic Impact
The UK automotive industry plays a crucial role in the economy, contributing £93 billion in turnover and £22 billion in value added annually. It invests around £4 billion each year in research and development (R&D). The sector employs approximately 198,000 people directly in manufacturing and supports around 813,000 jobs across related industries.
The automotive sector is also vital for UK exports, accounting for 12% of total goods exports. More than 140 countries import UK-produced vehicles, generating £115 billion from automotive imports and exports combined.
Future Prospects
SMMT welcomes commitments from the new government to develop an industrial strategy focused on competitiveness through investment in skills, clean energy, free trade, vibrant markets, and a fair transition to electric vehicles (EVs). The UK already boasts one of the most diverse automotive product bases globally.
The Society of Motor Manufacturers and Traders (SMMT) represents one of the largest trade associations in the UK automotive industry. It aims to foster growth and support net-zero goals while maintaining the UK's status as a global trade hub.
The automotive industry supports various other sectors such as advertising, chemicals, finance, logistics, and steel. Many manufacturing jobs are located outside London and the South-East with wages about 13% higher than the national average.
Despite recent challenges, including temporary supply chain issues affecting June's output by -2%, overall production remains robust due to post-Covid delivery backlogs being fulfilled last year. This resilience underscores the industry's ability to adapt and thrive amidst changing conditions.
The SMMT looks forward to collaborating with policymakers to ensure that manufacturers can drive economic growth and decarbonisation across all regions of the country.
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