The Society of Motor Manufacturers and Traders believes the long-term stability in the LCV market is insulating the sector against the potential impact of Brexit on the UK’s economy.
Registrations rose 1.2% in January year-on-year to 21,363 on the back of a 1.0% increase in 2016 to a record 375,687 units, before dipping by 4.3% in the low-volume pre-plate-change February market.
“We were taken aback by the January rise,” said Nigel Base, the SMMT’s CV boss.
He said the market’s strength provided a buffer against the current economic uncertainty.
The SMMT, which lobbied hard to remain in the European Union, wanted the UK to stay in the single market, which prime minister Theresa May has ruled out, and the customs union in order to maintain the automotive sector’s trading relationships with EU countries.
Base told What Van?: “We don’t want anything to change,”
He said the biggest issue at the moment was the lack of clarity surrounding what sort of trading environment would result once the negotiations triggered by Article 50 on 29 March (the process by which the UK leaves the EU) are completed.
“Do people make investment decisions?” Base asked. “They (LCV manufacturers and traders) look for reassurance but we can’t say what the details are. “We have set up a taskforce (to talk to Government and industry).”
According to the SMMT, UK commercial vehicle manufacturing grew 10.8% in January year-on-year to 7,502 units with exports fuelling demand, up 45.9% on the same
month in 2016.
In contrast, production for the UK market slumped by 26%. SMMT chief executive Mike Hawes drummed home the importance of European trade: “The strong performance was driven by continued overseas demand, with 96% of all exported CVs heading for Europe. For this performance to continue, the Government must secure the competitive trading conditions that are so vital to the sector’s success.”
However, sentiment among SMEs using vans is very different, according to a survey of more than 1,000 small business owners by leasing firm Vanarama.
Three quarters (74%) said Brexit would be good for their business, with restricting access to the UK’s borders (64%) being top of their wish list because they believe traders from Europe have undercut their markets. On the other hand, 42% of small business owners stressed the importance of tariff-free trade with the EU.