CEO Update

A bumper month for commercial vehicles

09 July 2021 #CEO Update

The UK’s increasing reliance on vans since the start of the pandemic continues to have a positive impact on the new light commercial vehicle market. With online retail and construction activity on the rise, June saw 34,363 new vans join British roads rounding off the third highest half year registrations since records began, according to the latest SMMT data released this week.

As business confidence grows, commercial vehicle fleets are gradually embarking on decarbonisation programmes so the announcement this week that Stellantis is investing significantly in electric van production at Ellesmere Port is more good news for the sector. Not only will this ensure that the latest, zero emission vans will be ‘Made in Britain’ but it will also help to improve air quality in our towns and cities as more of these models hit the streets in place of older variants. 

It’s also a major boost for the plant, the workforce and the region which, like the rest of the industry, has been operating under Brexit uncertainty for several years, stalling investment decisions. Coming hard on the heels of the Sunderland decision last week as well as the planning approval gained by Britishvolt in Northumberland, the future of the automotive manufacturing sector is becoming more optimistic. Nevertheless, the focus on competitiveness must remain as the moment it wavers, our attractiveness declines.

Full market transition and industry competitiveness still depends on other factors, not least the creation of 60GWh of battery production capacity in this country and the installation of a nationwide charging infrastructure with at least 2.3 million charging points. This infrastructure is all the more crucial with the number of new plug-in passenger cars registered continuing to increase. Last month battery electric and plug-in hybrid vehicles accounted for 17.2% of the 186,128 new cars registered with buyers attracted by a raft of new electrified models hitting showrooms.

While all new car registrations increased, this was artificially lifted from June 2020and, compared to the last decade average, registrations were -16.4% lower. This is the result of the sector battling against a ‘long Covid’ of vehicle supply challenges, most notable of which is the global shortage of semiconductors which is likely to affect production plans for the rest of the year at least. More positively, with the end of domestic Covid restrictions later this month looking more likely, business and consumer optimism should improve further, encouraging increased spending, especially as the industry looks towards September and advanced orders for the significant next plate change.

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