Automotive output springs forward 

Car manufacturing increased for the third month in a row in April with the Society of Motor Manufacturers and Trader reporting a 9.9% increase to 66,527 units. 

Meanwhile, commercial vehicle output is nine per cent up year-to-date after a 33% surge in April to 10,504. 

Production increases in the car sector were driven by a sharp rise in electric vehicle output, with hybrid electric (HEV), plug-in hybrid (PHEV) and battery electric vehicles (BEVs) rising 37.7% to 113,315 units. This represents 56.2% of combined volumes. 

However, the SMMT has warned of a looming cliff-edge when the more stringent rules governing the origin of materials used in electric vehicles and batteries come into force on 1 January, 2024. 

Mike Hawes, SMMT Chief Executive, said: “UK car production is starting to motor again, good news for the sector and the many thousands of jobs and livelihoods it sustains. These figures also show how exports, particularly to Europe, continue to be the foundation of British automotive manufacturing so we must do all we can to safeguard the competitiveness of these trading relationships. Most immediately, this means finding a solution to the rules of origin challenge faced by manufacturers on both sides of the Channel, else we risk the application of tariffs – and therefore unnecessary cost – on the very vehicles we are trying to encourage consumers to purchase.” 

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Cap report makes promising reading 

The latest car market overview produced by cap HPI has revealed an automotive industry in recovery mode. 

Figures published by the Society of Motor Manufacturers and Traders (SMMT) found that sales in April were up 11.6% on the same month last year to 132,990 units, while sales for the first four months of the year are 16.9% higher than in 2022.  

This is being driven partly by demand for battery electric vehicles, which has increased by 59.1% and 25.6% for April and the year to date respectively. BEVs now make up 15.4% of the overall car market in the UK.   

Demand for used cars also remains healthy, with retailers reported a stronger than expected demand in the first three months of 2023. A softening in the market is April and May has been attributed to the Easter Break, Bank Holidays and the King’s coronation.  

However, used car values have only dipped slightly despite this, falling one per cent in April and 1.2% in May.  

Electric vehicles are facing a sharper drop off though, falling by 4.1% (£850) at the three-year point in May, and by 3.1% (£1,100) at the one-year point. 

The report said, “Demand remains steady, with volumes well below pre-2020 seasonal norms, even though new car registrations are generating more used cars this year compared to last. The uncertainty of the May Bank Holidays will not be repeated, which could lead to an uptick in activity. 

“A further small average deflation in values is likely, but we are not predicting anything untoward.” 

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