Domestic Demand Shores Up U.K. Vehicle Production

U.K. vehicle production continues to accelerate with the best March since 2006 for the new-car build and the best quarter since 2010 for commercial-vehicle output.

Society of Motor Manufacturers and Traders figures show U.K. production rose 1.9% in March to 144,893 units.

Output for the domestic market jumped 24.5% to 41,339 units, reflecting continuing strong demand for new cars in the U.K. The silver lining was tarnished only by the export build, down 5.0% in March to 103,554 units, reducing its share of production to 71.5% from 76.6% a year ago.

The first quarter saw U.K. car production fall 0.6% to 402,193 units as the export order book slipped 6.8% to 296,678. Domestic builds rose a healthy 22.0% to 105,515 units.

The CV sector’s March output jumped 43.3% to 9,648 units, leaving the first quarter up 19.1% at 23,435 units.

SMMT CEO Mike Hawes attributes the growth to a strong home market and a ramping up of volume production to meet demand for new-to-market vans.

The U.K.’s CV sector saw a record quarter for sales with dealers delivering 108,456 units. This corresponds to a 63% upturn in production for the local market in March at 5,068 units and 37.0% growth over the quarter at 13,041.

CV production for the export market rose 31% in March to 4,580 units, while the first-quarter total improved 3.9% at 10,394.

“The CV sector has enjoyed a strong resurgence so far in 2015 after a subdued couple of years,” Hawes says. “Driving this readjustment is a home market invigorated by new product, increased consumer and business confidence (and) an upturn in demand for U.K.-built vans and trucks across Europe.

“This growth will help return the sector to a stable natural level following major restructuring of the industry in recent years.”

The figures come as new analysis by SMMT shows productivity in U.K. automotive manufacturing is at an all-time high. During the past five years, 11.5 vehicles were produced annually for each person employed in the industry. For the 2005-2009 period, the figure was 9.3 vehicles.