CV production heats up as car manufacturing slows

The UK’s automotive industry witnessed a significant divergence in production trends this summer, with commercial vehicle (CV) manufacturing surging to a 16-year high in July, while car production saw a notable slowdown. The latest figures from the Society of Motor Manufacturers and Traders (SMMT) reveal a striking contrast as factories ramped up output of commercial vehicles while preparing for new car models.

Commercial vehicle production rebounds

UK commercial vehicle production rebounded sharply in July, posting a remarkable 71.7% increase compared to the same month last year. A total of 15,252 units were manufactured, marking the best July performance since 2008 and a 201.8% increase from July 2019, before the pandemic struck. This surge ends a four-month streak of decline and propels the sector’s year-to-date output to 72,761 units, up 7.3% from 2023.

The uptick was fuelled by easing supply chain disruptions and robust demand from overseas markets. Exports accounted for 62.5% of all CVs produced in July, with the EU leading the charge, absorbing nearly all (99.1%) of these exports. The domestic market also saw significant growth, with production for UK buyers climbing by 63.7% to 5,718 units.

“Sustaining strong global demand for British-built vans, trucks and buses, which are increasingly zero emission, now depends on maintaining favourable trading conditions, creating healthy markets at home and boosting UK competitiveness on the global stage.”

Car production slows amid transition

In contrast, UK car production experienced a downturn in July, with output falling by 14.4% to 65,478 vehicles. The decline is largely attributed to model changeovers and temporary supply chain challenges. This represents a temporary setback following strong growth in the previous year.

Despite the reduction in total volume, the production of electrified vehicles—comprising battery electric, plug-in hybrid, and hybrid models—remained resilient, maintaining a 37.5% share of total output, only slightly down from 39.5% in July 2023.

Exports continue to dominate the UK car manufacturing landscape, with more than 80% of vehicles produced in July destined for customers overseas, with the five largest markets by volume encompassing the EU (51.3% of exports), US (17.6%), China (8.6%), Turkey (5.5%) and Japan (3.1%). However, total export volumes for the month fell -16.3%.

Year-to-date figures show a mixed picture, with domestic car production up 14.8% but export volumes down by 14.3%. Despite these fluctuations, the overall value of UK automotive production remains substantial, estimated at over £20 billion, unchanged from the same period last year.

Mike Hawes acknowledged the challenges ahead, noting, “Following significant growth last year, some readjustment in output was to be expected. Indeed, an ongoing degree of volatility is likely as the industry restructures to transition to zero emission vehicle production. As the billions already committed to new models start to deliver a return, volume growth will resume, providing we seize every opportunity to enhance our global competitiveness.

“We need investment in skills, healthy markets, cheaper green energy, and fair trade deals that help British-built vehicles reach international customers more easily, all of which should be wrapped in an over-arching industrial strategy that ensures automotive continues to be a key driver of economic growth.”