Vehicle output bounces back sharply in April reversing sluggish Q1
CAR manufacturing in the UK rose 16.6% last month lifting output after a sluggish start to the year in the first quarter.
Latest figures from the Society of Motor Manufacturers and Traders show 110,033 units rolled off the production lines in April. This means that after the subdued Q1 output is up 1.5% on last year at 503,449 units.
The growth is said to reflect strong demand in the UK market – up 66.1% last month. However, weak European demand remains a concern to the industry.
Independent analysts have suggested that UK car manufacturing could grow a third bigger by 2016 with growth expected year-on-year.
Mike Baunton, SMMT Interim Chief Executive, said: “UK car production bounced back in April, up almost 17%, following a sluggish Q1 that was impacted by an early Easter and continuing uncertainty across Europe.
“Significant growth in output for the home market reflects trends in new car buying in the UK, and the focus on growing in new markets, beyond Europe, has provided further buoyancy to volumes. While demand in Europe overall is very weak, the global appeal of our products, coupled with long-term investment strategies, position the UK on a secure path to achieve further growth and jobs in the sector.”
Of the vehicles produced, 79.8% were set for export (2012: 85.8%) – a fall of 8.4%. In the year-to-date, exports are down 4.2% at 390,918 (2012: 408,084).
John Leech, Birmingham-based UK Head of Automotive at KPMG commented: “With new cars sales stabilising in Germany and Spain and still powering ahead in the UK, the mood in the UK car industry is brightening. UK car production looks set to grow again in 2013, which will make it the fourth consecutive year of growth contrasting sharply with the rest of Europe which is expecting its seventh straight year of decline.
“Compared to Europe, the UK has a higher proportion of premium car plants such as JLR and Mini, which export to fast-growing emerging markets and whose consumers have been more confident over the past year. Our medium-term forecast remains positive, with UK vehicle production set to grow from about 1.5m to 1.9m in 2016 based on manufacturers’ latest plans.”
Commercial vehicle output fell 3.3% in April to 8,623 units, however, the fall was less pronounced and output for the home market grew.
CV output so far this year is down 15.2% and while some CV manufacturers are performing better than others, net volumes are expected to fall over the full year.
“Demand for UK-built commercial vehicles continued to fall in April, with output dropping 3.3%. There is growth at some UK plants which helped to ease the rate of decline compared to previous months this year,” added Baunton.
“2013 is proving to be a difficult year for our CV manufacturers as they experience weak demand from export markets, particularly Europe. Rising output for the home market is encouraging, demonstrating that UK operators are keen to exploit the diverse variety of CVs made in the UK from light vans to double-decker buses and large trucks.”
UK engine production rose 10% in April to 211,452 units. Volumes for the home market rose, in line with registration trends. Export volumes have fallen so far this year, however, last month saw a modest rise.
