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UK CV Manufacturing Up 11.3%

UK factories produced 73,600 commercial vehicles in 2021, up 11.3% from the previous year. The number includes vans, trucks, buses, coaches, and taxis, though most of the increase came from vans and home delivery vehicles.

While this is an encouraging number when viewed alone, the context makes it a little less impressive. 2020, with its social distancing measures, lockdowns, and manufacturer closures, contributed to the worst manufacturing year on record.

The result of this is that, despite improving on 2020, the 2021 statistics were still down by 12,356 units (14.4%) on the five-year pre-pandemic average.

The majority of the year-on-year increase was due to the domestic market, with vehicles produced for the UK up by 27.3%. The overseas market remained stable, down only 0.6%.

In terms of overall output, exports took up a little more than half of all production, at 51.2%, of which the vast majority (93.2%) were shipped to EU markets.

Mike Hawes, SMMT chief executive, said: “After the worst year in a lifetime, the growth in production for commercial vehicles during 2021 is extremely welcome. Despite a plethora of challenges, manufacturers have remained operational throughout the year. The sector isn’t out of the woods yet, however, and challenges remain heading into 2022. Support will be necessary to ensure the supply chain can overcome ongoing semiconductor-related shortages as well as measures to ensure energy costs do not rise to an extent that it significantly undermines competitiveness.”

We expect this trend to continue, and for production to return to, and eventually surpass pre-covid levels, but the timeframe is still a little uncertain. It might be a couple of years before manufacturing returns to normal and the long queues for orders are reduced to more manageable levels.

In the short-term, it may still be advisable to look at in-stock options when choosing a new van lease, as opposed to a factory order, at least until the order back log is cleared.