Tag Archives: SMMT

Overseas demand drives UK CV manufacturing in April

DICV-1

 

  • UK commercial vehicle manufacturing up a fifth in April, with more than 7,000 units produced.
  • Exports demand continues to drive output, up 28.5% to take 70.9% production share.
  • Year-to-date production remains down, with 26,551 CVs produced so far this year.

UK commercial vehicle (CV) manufacturing increased by almost a fifth (19.0%) in April 2018, according to figures published today by the Society of Motor Manufactures and Traders (SMMT). 7,299 CVs were built in Britain last month as a rise in overseas demand boosted production.

Production for export in the month increased by 28.5%, with more than seven in 10 CVs destined for international markets. Meanwhile, demand from domestic fleets remained stable, up 0.9%, with 2,124 vans, trucks and buses produced for UK customers.

Year-to-date production figures remain down, falling -10.2% on 2017, with manufacturing for both domestic and overseas markets declining -21.1% and -4.3% respectively. However, in line with the monthly figures, exports continue to account for the lion’s share of production, at 68.8%.

Mike Hawes, SMMT Chief Executive, said,

While it is positive to see an increase in CV production, given the fluctuating nature of fleet buying cycles, caution is advised when making month-by-month comparisons. However, today’s figures highlight just how dependent the industry is on production for export, particularly to the EU – our largest customer. If we are to see future long-term growth, government must negotiate the right Brexit deal to ensure our mutual trade remains free and free flowing.

Soure: SMMT

Connected and autonomous vehicles set to provide huge economic benefits to the UK

Connected and autonomous vehicles (CAVs) will provide huge social, industrial and economic benefits to the UK. In particular, these innovative vehicles will expand our industrial base, improve safety and congestion, drive up productivity and free up space usually devoted to vehicles in our urban areas.

CAVs will transform the lives of six out of every 10 people in the UK, according to our research published in Connected and Autonomous Vehicles: Revolutionising Mobility in Society. The first comprehensive UK-based study of the human impact of CAVs, canvassed the views of more than 3,600 respondents and found that this new technology will offer freedom to some of society’s most disadvantaged, including those with disabilities, older people and the young.

Connected vehicle technology is varied and can be grouped under the following headings:

  • In-vehicle systems
  • Commercial management systems
  • Infrastructure systems
  • Vehicle to vehicle systems (V2V)
  • Vehicle to infrastructure (V2I)

There is already a staggering level of connectivity and autonomy in vehicles compared to just a decade ago – in 2015, more than half of all new cars sold in the UK featured autonomous safety features. Autonomous emergency braking and lane assist technologies provide safer driving and internet connectivity over mobile networks is capable of keeping vehicle occupants connected to the online world.

According to the KPMG study commissioned by SMMT, connected and autonomous vehicles are set to add £51 billion a year to the UK economy by 2030. This is in addition to creating 320,000 jobs news, 25,000 specifically in automotive manufacturing.


connected autonomous vehicles graphics

To find out more about connected and autonomous vehicles read our position paper.

Source: SMMT

 

Unhelpful talk of a crash in new car registrations belies the facts

Unhelpful talk of a crash in new car registrations belies the facts. New car registrations were indeed down in March by -15.7%. Two issues are relevant, however. First, March 2017 was a bumper month, the biggest ever in fact, as many consumers pulled forward purchases ahead of changes to Vehicle Excise Duty in April. Secondly, we must remember that this March is still the fourth best in a decade and the market is still at historically high levels with well over 700,000 motorists driving home a new car so far this year.

Nonetheless, there is cause for concern given the market for new cars is down across the board. Private, business and fleet were all negative and, in the CV sector a drop of -5.6% is indicative of declining business and consumer confidence. Furthermore, the continuing drop in demand for diesel cars and disappointing demand for alternatively fuelled vehicles is further evidence of the need for clearer government policy, incentives and advice that encourages consumers to buy the right car for their driving needs irrespective of fuel type. Consumers and businesses also need the right economic conditions to have the confidence to buy new vehicles and it is important to remember that a thriving new car market is essential to the overall health of our economy.

We were pleased to see the merits of Vauxhall’s Luton plant recognised this week, with the announcement that the latest Vivaro van will be built in Britain. The decision helps to secure around 1,400 jobs and in time could see Peugeot and Citroën branded vans made in the UK. The UK remains a centre of excellence for vehicle production – with one of the most productive workforces in Europe – an essential component of our current competitiveness, along with our frictionless trade with Europe. We will continue working closely with government to deliver an industrial strategy and sector deal for automotive, one which builds on our long heritage in vehicle manufacturing.

Finally, you will have noticed that Update has changed slightly this week – we hope you like the new format and style and it continues to be on your essential reading list every Friday.

Source: Mike Hawes, SMMT, Chief Executive

2017 UK car manufacturing declines by -3% but still second biggest output since turn of the century

  • 1.67m cars built in the UK in 2017, a decline of -3.0% with production for domestic demand down -9.8%.
  • Car exports remain at historically high level, down just -1.1% with 1.34m shipped worldwide – 79.9% of total production.
  • British engine manufacturing at record-ever levels, with 2.72m produced, up 6.9% on 2016.
  • SMMT restates need for urgent clarity on Brexit transition, as new calculations show over 10% of exports could be at risk on 30 March 2019 unless we secure all current trading arrangements.

UK car production declined in 2017, according to the latest figures published today by the Society of Motor Manufacturers and Traders (SMMT). 1,671,166 vehicles rolled off production lines last year, a -3.0% decrease on 2016 and the first decline for eight years – but still the second highest output in 17 years.1

A -9.8% fall in output for the domestic market drove the overall decline, as the market responded to declining business and economic confidence and confusion over government’s policy on diesel. Exports also fell, though at a much lower rate, by -1.1%. Overseas demand continued to dominate production, accounting for 79.9% of all UK car output – the highest proportion for five years.2 The EU remained the UK’s biggest trading partner, taking more than half (53.9%) of exports, while the appetite for British-built cars rose in several key markets, notably Japan (+25.4%), China (+19.7%), Canada (+19.5%) and the US, where demand increased 7.0%.

Nevertheless, the latest figures is approximately 130,000 units below the mid-year forecast, given lower than expected demand primarily in the domestic market. This significant decline in production underscores the importance of government and industry working together to ensure the right conditions for the sector. The Industrial Strategy and, in particular, a Sector Deal for automotive are important but must be supported across government ensuring all policies align to the goal of a vibrant and growing industry.

The UK’s growing reputation as a centre for excellence in powertrain design and manufacturing, meanwhile, helped drive engine production to record levels. Demand for UK-built engines grew at home and overseas, with overall output up 6.9% to more than 2.7 million – with 54.7% destined for car and van plants around the world, the majority in the EU. The growth is the result of significant investment in plants now producing high tech, low emission petrol and diesel engines. Last year, more than 1 million diesel and 1.7 million petrol units were built in Britain, delivering £8.5 billion to the economy.3 These latest figures highlight the importance of diesel and petrol engine manufacturing in the UK – with some 8,000 people employed in engine production and 3,350 directly employed in diesel engine production.4

The news comes as UK Automotive restates the need for an urgent agreement on the terms of a post-Brexit transition deal. This must be comprehensive, result in no change and allow business to continue as usual until a new trading relationship with the EU is in place. This means maintaining the UK’s membership of the single market and customs union and addressing critical details that, if ignored, could have a damaging effect on the industry’s competitiveness.

The agreement must include guarantees that the UK will continue to benefit from EU Free Trade Agreements (FTAs) and Customs Union arrangements with third countries, for the full duration of transition. Latest SMMT calculations show more than 10% of UK car exports go to countries with which the EU has advantageous trading arrangements including South Korea, Canada, Turkey and, soon, Japan.5 Secondly, vehicle certifications that have been issued in the UK must remain valid at home and abroad so that vehicles can continue to be sold across the EU. Finally, no new customs checks, which would add cost, cause delays and disrupt manufacturing, should be applied during the transition.

Mike Hawes, SMMT Chief Executive, said,

The UK automotive industry continues to produce cars that are in strong demand across the world and it’s encouraging to see growth in many markets. However, we urgently need clarity on the transitional arrangements for Brexit, arrangements which must retain all the current benefits else around 10% of our exports could be threatened overnight.

We compete in a global race to produce the best cars and must continue to attract investment to remain competitive. Whilst such investment is often cyclical, the evidence is that it is now stalling so we need rapid progress on trade discussions to safeguard jobs and stimulate future growth.

Hawes spoke as SMMT also released new figures showing that UK automotive investment fell by 33.7% in 2017. Some £1.1 billion of investment earmarked for vehicle and supply chain manufacturing was publicly announced last year, down from £1.66 billion in 2016.

  1. Annual car production last declined in 2009. Total output was higher in 2016, and prior to that, in 1999
  2. In 2012, exports as a proportion of production was 82.7%
  3. SMMT calculations
  4. SMMT data
  5. Taking into consideration EU-wide trade deals in force and yet-to-be-ratified agreements, the UK automotive industry benefits from bilateral trade pacts between the EU and several of the sector’s top 10 export markets, including Turkey, Japan, Canada, South Korea and EFTA countries (Switzerland, Norway, Iceland and Lichenstein). Taken together, these countries cover more than 10% of UK automotive exports.

Source: SMMT

 

UK new car market reports slower August as more buyers await new 67-plate

car manufacturing


  • New car registrations fall -6.4% in August to 76,433.
  • AFV demand surges 58.3% as more motorists switch on to alternative powertrains.
  • Year-to-date market holds steady, down -2.4%, with 1.64 million cars joining British roads in 2017.

SEE CAR REGISTRATIONS BY BRAND

The UK new car market reported its fifth consecutive month of decline in August, according to figures published today by SMMT. Registrations fell -6.4%, after a record August in 2016.

However, with more than 76,000 new cars registered, the performance still represents the third biggest August in 10 years.1 Year to date, the market remained broadly in line with expectations, down -2.4%, with 1,640,241 new cars joining British roads in the first eight months.

Superminis and small family cars remained the most popular types in August, accounting for more than half (58.3%) of registrations. However, SUVs, larger family cars and executives were the only segments to grow, up 7.9%, 2.2% and 1.1% respectively.

Meanwhile, more people chose to get behind the wheel of an alternatively fuelled vehicle (AFV) than ever before in the month, accounting for a 5.2% share of the market.2 Demand for petrol hybrid and pure electric battery powered cars increased substantially, up 74.9% and 62.5%, while plug-in hybrid registrations rose 38.5%. Conventional petrols grew 3.8% and diesels fell -21.3%.

Mike Hawes, SMMT Chief Executive, said,

August is typically a quiet month for the new car market as consumers and businesses delay purchases until the arrival of the new number plate in September. With the new 67-plate now available and a range of new models in showrooms, we anticipate the continuation of what are historically high levels of demand.

Notes

  1. August 2016: 81,640; August 2015: 79,060; August 2007: 77,649
  2. The previous AFV record market share for August was 3.1% in 2016

Source: SMMT

 

British car manufacturing rebounds in July as new models hit production lines

  • UK car output rises 7.8% in July as manufacturers ramp up production with new models.
  • After seven months of decline in the domestic market, production increases 17.7% ahead of number plate change in September.
  • Year-to-date performance remains strong, with production passing the one million mark and in line with expectations.

British car manufacturing rose 7.8% in July, with 136,397 new units rolling off UK production lines, according to figures released today by SMMT. Major carmakers ramped up production for new and existing models in the month ahead of summer factory shutdowns, which provide an essential period for plant maintenance, upgrades and re-tooling.

Production for the UK bounced back in July, in readiness for the important September market, following seven successive months of decline, rising 17.7% – an increase of 4,490 units – while exports also grew by 5.3%. Cars made for overseas buyers represented nearly 80% of output in the month with 106,525 units shipped abroad, compared with 29,872 which stayed at home.

Year-to-date new car production remains solid and has now passed the one million mark, though showing a slight dip of -1.6% compared with 2016, in line with expectations. Since January, overseas customers have taken delivery of 78.8% of new cars made in Britain, with UK manufacturers now exporting cars to more than 160 different countries around the world.

Mike Hawes, SMMT Chief Executive, said,

UK car production lines stepped up a gear in July, as usual bringing forward some production to help manage demand ahead of September and routine summer factory shutdowns. As the timing and length of these manufacturing pauses can shift each year, market performance comparisons for July and August should always be treated with caution, but as long as the economic conditions at home and abroad stay broadly stable we expect new car production to remain in line with expectations for the rest of 2017.

Source; SMMT

SMMT Brexit Update

 

SMMT_Master_Brandline_(RGB)

The latest round of negotiations over the terms of Britain’s departure from the EU began in earnest this week. Europe’s leaders have been clear that sufficient headway must be made on exit terms before talks on future trade can begin, so UK business will hope for swift and sure progress.

To that end, it is pleasing to see both the Prime Minister and the Chancellor meeting with industry groups this week. Commentators are beginning to see business as increasingly influential in any future agreement – as well they should. Business operations are often determined by EU rules and many firms are also well versed in the minutiae of trading within the EU and without.

Yesterday Theresa May’s new business advisory group met for the first time to discuss concerns around the UK’s withdrawal. Meanwhile, Phillip Hammond, speaking to the CBI on Monday, noted that Brexit is just one in a series of issues facing Europe and the Eurozone and called on businesses to stress the need for agreement on key issues to their continental colleagues and partners.

The truth is that those operating within global and European supply chains see the necessity of a deal most clearly. Therein much of the trouble could lie – the flow of goods across Britain and Europe will need to be maintained while clarity over regulation and continued participation in existing EU trade deals with key international markets must be assured. Yet more reason automotive must be considered a priority sector throughout the Brexit process.

SMMT continues to reiterate its priorities for Brexit and to advise government on the complex rules and regulations with which the motor industry must comply. More information on the industry position is available on our website at www.smmt.co.uk/brexit.

Britain’s trade with Europe will not cease. It’s competitveness, however, will be threatened. UK companies’ expertise and quality products will continue to attract global customers but the cost of those products and services is harder to forecast.

Soure: Mike Hawes, SMMT Chief Executive

Carmakers call for transitional EU deal

car-manufacturing

 

The government must secure a transitional Brexit deal to protect the future of the UK car industry, a trade group has said.

The Society of Motor Manufacturers and Traders (SMMT) said Britain was highly unlikely to reach a final agreement with the EU by the March 2019 deadline.

That meant carmakers could face a “cliff edge”, whereby tariff-free trade was sharply pulled away.

It warned the industry would suffer without a back-up plan in place.

The EU is by far the UK’s biggest automotive export market, buying more than half of its finished vehicles – four times as many as the next biggest market.

UK car plants also depend heavily on the free movement of components to and from the continent.

The SMMT said any new relationship with the EU would need to address tariff and non-tariff barriers, regulatory and labour issues, “all of which will take time to negotiate”.

“We accept that we are leaving the European Union,” said chief executive Mike Hawes.

“But our biggest fear is that, in two years’ time, we fall off a cliff edge – no deal, outside the single market and customs union and trading on inferior World Trade Organization terms.

“This would undermine our competitiveness and our ability to attract the investment that is critical to future growth.”

He called on the government to seek an interim arrangement, whereby the UK stayed in the single market and customs union until a new relationship was brokered.

UK car manufacturing generated £77.5bn of turnover last year and accounted for 12% of all goods exports, according to the trade group.

It added that almost a million people were employed across the wider automotive industry.

Source: BBC News

Record first quarter for UK used car market

SMMT_Master_Brandline_(RGB)

 


  • 2.1 million used cars sold in the UK in Q1 2017, a 3.4% rise on 2016, and the highest Q1 on record.1
  • Growth seen across diesel, petrol and electric/hybrids, up 5.6%, 1.6% and 43.2%.
  • Mini segment sees biggest growth, up 13.2%, but supermini still has most sales with 728,145.

The UK used car market got off to a strong start in 2017 with a record number of vehicles sold in the UK in the first quarter, according to data released by SMMT. 2,133,956 used cars changed hands in the first three months of the year, 3.4% more than in 2016 resulting in the biggest-ever volume seen in Q1.

Diesel and petrol sales remained steady, with gains of 5.6% and 1.6% respectively. Of the 851,569 used diesel cars sold in Q1, one in five were the latest low emission Euro 6 models. More motorists also took advantage of the wide range of alternatively fuelled hybrid, electric and hydrogen cars entering the second hand market, with registrations rising 43.2% to 21,320 units. This segment accounted for 1.0% of the market, compared with 0.7% last year.

The supermini segment continued to be the most popular, accounting for more than a third of the used car market, however, the mini segment was the fastest growing – with sales up 13.2%.

While silver remained the best-selling colour at 463,959 sales, figures show its popularity may be fading with sales declining -2.1%. White cars saw the biggest growth, up 17.1%, with used car sales echoing trends seen in the new car market in recent years.

Mike Hawes, SMMT Chief Executive, said,

A buoyant used car market combined with strong residual values is good news for the sector, with motorists benefitting from the wide range of models and high-tech safety and connected features entering the market. Diesel cars remain as popular as ever, with consumers now able to take advantage of the low emission Euro 6 diesels available in the used car market. It’s also positive to see sales of used electric and hybrid vehicles rise, reflecting what we have seen in the new car market. To ensure this growth is maintained and the benefits of low emission vehicles spread quickly throughout society, continued investment in infrastructure, incentives and a tax regime that encourages demand is essential.


Notes
1 SMMT used car sale records begin 2001. Second highest Q1 on record is 2016 with 2,063,674.

Greg Clark’s Vison for the UK to become an Innovator in Automotive Technology

SMMT_Master_Brandline_(RGB)

On Tuesday, less than two weeks after Business Secretary Greg Clark outlined his vision for the UK as a CAV test bed to an SMMT Connected audience, he joined Transport Minister John Hayes in announcing how £109 million will be invested to help create the next generation of cutting-edge vehicles.

Along with a significant financial commitment from industry, government has backed 38 connected, autonomous and low emission vehicle technology projects across Britain, through the CAV2, OLEV and Advanced Propulsion Centre funding competitions. As ever, the winners exemplify the diversity of R&D taking place within the UK. We eagerly await announcements for the CAV3 competition later this year.

The UK is already a hotbed of innovation and we want to be the destination of choice for the development and testing of connected, autonomous and low emission vehicles. Government collaboration and investment, combined with funding from industry, will help this technology flourish and the UK to reap substantial economic and social benefits.

Following last week’s news that diesel cars are proving more popular than ever, SMMT set out to put the record straight on their contribution to air quality, climate change and the functioning of the national economy and society. Delivering only one side of the argument does a disservice to consumers, who must make a decision about which vehicle is right for their driving needs. For many, especially those that cover high miles, the answer will still be a new, Euro 6 emissions standard diesel. These modern cars, which contribute greatly to reducing CO2 emissions, are the cleanest diesels ever produced and, importantly, they will not be subject to charges in the new London Ultra Low Emission Zone.

There remains much more to discuss for UK Automotive as the year goes on and Brexit negotiations begin. The SMMT International Automotive Summit, launched this week, sees a return to the stage of last year’s lively Brexit panel, including Chris Giles, Economics Editor at the FT, and Bronwen Maddox, Director of the Institute for Government. Further sessions will focus on supply chain and retail, as well as the ever-important topic of sustainability, coinciding with the 18th edition of SMMT’s annual Sustainability report. Make sure Tuesday 20 June 2017 is in your diary and then get your tickets here.

Mike Hawes, SMMT Chief Executive
Follow @SMMT on Twitter

Source: Mike Hawes SMMT