This year’s surging commercial vehicle (CV) production isn’t news anymore. We’ve covered it every month this year. Yet June’s figures from the Society of Motor Manufacturers and Traders (SMMT) were impressive, even by 2015 standards.
Both UK and export demand rose by more than 50%. Exports typically go to the EU and have been somewhat depressed this year, thanks to the combination of nationalistic vehicle buyers and depressed economies that make up the eurozone (I’ll leave you to decide which countries I’m referring to…).
Total manufacturing output rose by 54.5% to 9,805 units in June, a stunning increase on last year’s total of 6,348. Here’s how the figures break down:
| CV manufacturing | June-14 | June-15 | % Change | YTD-14 | YTD-15 | % Change |
| Total | 6,348 | 9,805 | 54.5% | 37,460 | 48,677 | 29.9% |
| Home | 3,054 | 4,769 | 56.2% | 18,598 | 24,471 | 31.6% |
| Export | 3,294 | 5,036 | 52.9% | 18,862 | 24,206 | 28.3% |
| % export | 51.9% | 51.4% | 51.2% | 49.7% |
Data courtesy of SMMT (www.smmt.co.uk)
This is great news for the UK economy. It may be no coincidence, too, that Britain’s automotive firms employ some of the most productive employees in Britain. According to a news story that’s been widely covered this week, productivity in the UK car industry is 35% higher than in 2010. Employees generate £100,000 per year in added value, more than twice the national average of £46,000.
I assume the same figures apply to employees at Britain’s commercial vehicle manufacturers — almost certainly in the case of Vauxhall, the UK’s largest volume CV manufacturer, as it also makes cars.
The reasons for this impressive performance seem to be modern, heavily automated factories, well-trained and loyal staff who are paid reasonably well, and a desirable product for which demand is currently very strong.
Unsurprisingly, SMMT chief executive Mike Hawes is bullish about prospects going forward:
“Today’s figures are encouraging for the sector, with demand for British-built vans, trucks and buses all on the rise. The UK commercial vehicle industry has experienced some turbulence in the recent past, with restructuring of some operations and changes to type approval affecting output. It is good to see the recovery continuing, and we are optimistic about the future with demand continuing to grow both in the UK and in Europe.”
However, while the car industry is hitting new records for production, it’s worth remembering that only a few years ago, the CV sector was cranking out more than twice as many vans and trucks as it is today:
Rolling year CV output, June 2008 – June 2015 (graph courtesy of SMMT)
A return to past levels of production seems unlikely, due as the big loss is due to the closure of volume plants such as Ford’s Southampton Transit plant, which are unlikely to return to the UK from cheaper climes abroad (Turkey, in Ford’s case).
Good news, although the evident success of UK-based automotive manufacturers has made me wonder. Was the move to offshore manufacturing driven by more attractive economic fundamentals, or simply the desire to avoid the costs of updating old UK factories?