UK CV manufacturing Feb 2017

UK CV production falls 6.3% in February as domestic demand slows

UK production of commercial vehicles (CV) fell by 6.3% to 7,940 units in February, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).

The main reason for the decline was a 30% fall in domestic demand, which fell to 2,793 units, down from 4,019 units during the same period last year. Export demand for UK-built vans remained strong, with manufacturers rolling out 15.6% more CVs than during the same period in 2016.

UK CV manufacturing Feb 2017

UK CV manufacturing Feb 2017 – source: SMMT

According to Mike Hawes, SMMT chief executive, this domestic slowdown is to be expected after two years of strong growth:

“Following two years of exceptionally strong output, it comes as no surprise to see a slight decline in commercial vehicle manufacturing. Despite this, UK CV production remains broadly stable, with output for export growing for the sixth consecutive month, highlighting the importance of maintaining competitive global trading conditions to this vital sector.”

I can certainly buy into this argument up to a point. As LCV registration figures for the last five years show (scroll down for graph), CV operators have done a lot of catching up over the last two years. Many of these firms’ vehicles had been allowed to age during and after the financial crisis. But this process of renewal and expansion is now largely complete.

Some kind of ‘back to normal’ adjustment will be required. As I’ve discussed before, this could take the form of slowing new sales and/or weaker used prices. To some extent the scale of the adjustment will depend on how well the UK economy performs as we head towards Brexit over the next couple of years.

Time will tell. But for now at least, it’s comforting to see that EU export demand is helping to keep UK CV production lines busy.

1 thought on “UK CV production falls 6.3% in February as domestic demand slows

  1. Pingback: UK commercial vehicle manufacturing drops 4.3% in March | Van News: The VanRental.co.uk Blog

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