Automotive News Nov/Dec 2020

New HGV registrations decline -1.6% in Q3 2020

 UK HGV market dips by 138 units to 8,419 in Q3 after turbulent first half of the year.
 Demand for rigids up by 12.6% mirroring demand for essential delivery services and construction as lockdown measures eased over the summer.
 Market currently down -39.6% year to date, representing a drop of more than 14,000 units.

The UK’s new heavy goods vehicle (HGV) market declined slightly in the third quarter of 2020, down -1.6% with 8,419 units registered, according to figures published today by the Society of Motor Manufacturers and Traders (SMMT). The decline was far smaller than that seen in the first half thanks to the easing of the UK’s first Covid-19-enforced lockdown, balanced by an increase in demand for rigids as key sectors, including deliveries and construction, continued working throughout the pandemic. This also follows a particularly weak third quarter in 2019, which saw orders pulled forward into Q2 ahead of new smart tachograph regulations.1

Articulated heavy truck demand fell by -17.1% in the quarter, although this decline was entirely attributable to an -18.6% drop in tractor registrations, which accounted for more than a third (38.8%) of the HGV market. Meanwhile, it was a brighter three months for rigid trucks, with the >6-16T and >16T segments growing by 20.8% and 8.5% respectively, leading to a 12.6% overall increase for the segment.
In the year to date, however, the overall market remains -39.6% down on the same period in 2019, equivalent to a loss of 14,258 units year on year. Mike Hawes, SMMT Chief Executive, said,
While Q3 saw some stability return to the HGV market, this may well be short-lived amid fresh autumn lockdowns across Wales and England.

These lockdowns should serve as a reminder of the critical role the industry plays in keeping the country’s shelves stocked with vital supplies, and the need to provide operators with business certainty and confidence.

As the end of 2020 approaches, this will mean a redoubling of efforts to secure a zero-tariff trade deal with EU, as well as promoting fleet renewal to help drive a green recovery for the sector, and the UK.

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Mercedes-Benz is set to take a 20% stake in Aston Martin as part of a £1.25bn rescue package to boost the struggling luxury car brand.
The German firm will become a supplier of engines and electric power trains to Aston Martin in a £286m deak which will also see its stake built from 2.3% to owning a fifth of the West Midlands firm.

A caveat in the deal is that if Aston Martin’s share price dips below Mercedes’ entry price, Aston will have to pay out for the new tech.
Industry analysts say it could lead to Mercedes launching a takeover deal for one of the last British independent car makers.
David Bailey, an automotive industry expert at Birmingham university, told The Telegraph: “Aston is too small to survive on its own and is dependent on Mercedes technology.

“This arrangement gives them 20% so they don’t have outright control but Aston’s reliance on Mercedes technology gives it control in that respect. At the right price, they could purchase what is a very cool brand.”

Laurence Stroll, the owner of Aston Martin, is also buying up shares so that he remains the largest shareholder ahead of Mercedes.
Gaydon-based Aston Martin announced yesterday that in the first nine months of this year it sold 2,752 cars, generating turnover of £270m and a £308m pre-tax loss

The UK new car market declined again in October, with registrations falling by -1.6% year on year, according to the latest figures published today by the Society of Motor Manufacturers and Traders (SMMT). The industry recorded 140,945 new registrations last month, making it the weakest October since 2011 and -10.1% lower than the average recorded over the last decade.

The arrival of new models and ongoing financial incentives helped initially to sustain UK demand in the month, but the introduction of a ‘firebreak’ lockdown in Wales on 23 October contributed to the nation recording -25.5% fewer registrations by the end of the month, which accounted for more than half of the overall UK decline.

Subdued activity from businesses drove much of the month’s drop, with around 2,500 fewer vehicles joining larger fleets than in October last year, while private registrations saw a modest increase of 0.4%. However, this performance was flattered by a weak October 2019, when ongoing supply issues arising from regulatory challenges, as well as political and economic uncertainty ahead of the anticipated Halloween Brexit withdrawal date, saw overall registrations by private buyers recede by -13.1% in the month.

As of mid-October, the industry had been expecting to register about 1.66 million new cars in 2020. However, with the announcement of a second lockdown for England, which will include the closure of vehicle showrooms, the market forecast has been downgraded by a further 100,000 units to 1.56 million. This equates to a total year-on-year decline of around 750,000 registrations 2 and a £22.5 billion loss in turnover 3, with 2020 now likely to be the weakest year since 1982.4
While the continuation of click & collect and delivery services is welcome, and should help prevent a return to the sales wipe-out experienced in the spring, it cannot offset the loss of custom from the closure of showrooms themselves, given the unique nature of the car purchase process.

Mike Hawes, SMMT Chief Executive, said,
When showrooms shut, demand drops, so there is a real danger that with England today entering a second lockdown, both dealers and manufacturers could face temporary closure. What is not in doubt, however, is that the entire industry now faces an even tougher end to the year as businesses desperately try to manage resources, stock, production and cashflow in the penultimate month before the inevitable upheaval of Brexit. Keeping showrooms open – some of the most Covid-secure retail environments around – would help cushion the blow but, more than ever, we need a tariff-free deal with the EU to provide some much-needed respite for an industry that is resilient but massively challenged.

The UK new light commercial vehicle (LCV) market grew for the second consecutive month in October, up 13.3% to mark the highest performing October on record,1 according to the latest figures published today by the Society of Motor Manufacturers and Traders (SMMT). Some 28,753 vans, pickups and 4x4s were registered in the month, following a weaker than usual October 2019 when the market was impacted by ongoing supply challenges around WLTP approved vehicles.2

Demand was driven by the heavier end of the LCV market, with registrations for vans weighing more than 2.5 and up to 3.5 tonnes up 26.8% to 20,492 units.

A combination of pent up demand from the UK’s first lockdown, growth in the construction sector and new fleet orders coming in ahead of an anticipated busy Christmas period kept van deliveries high in the month

Continuing the trend, registrations for smaller vans weighing less than or equal to 2.0 tonnes and medium vans weighing more than 2.0 tonnes and up to 2.5 tonnes both grew 1.6% and 2.9% respectively. However, 4x4s and pickups both saw a dip in demand, with registrations down -33.6% and -31.8% respectively, in part reflecting difficulties faced by the agriculture sector.3

Year-to-date registrations are still down -24.1%, with the sector yet to make up a shortfall of around 75,000 units. With a second lockdown beginning today and lasting at least a month, 2019’s performance will be impossible to match.

Mike Hawes, SMMT Chief Executive, said,
A second month of growth for the van market is testament to the resilience of the sector and society’s reliance on it amidst a difficult year. However, with a second nationwide lockdown ahead, future performance is difficult to gauge. Industries such as construction and logistics will keep the country moving as they did earlier in the year, but continued uncertainty and closures across retail and hospitality will have an effect on all businesses, and consequently commercial vehicle demand. Now more than ever, industry needs the assurance of a tariff-free deal with the EU to ensure production and delivery of these essential vehicles continues with no interruption in the difficult months ahead.

Japanese carmaker Honda has warned that production at its Swindon plant will be disrupted, after transport problems caused a shortage of parts.

The plant operates on a “just in time” production system, where parts arrive at the factory when they are needed.

Honda has told employees that it is currently experiencing vessel delays and congestion at UK ports.

It will pause production on Wednesday “due to transport-related parts delay”, the car giant said.

“The situation is currently being monitored with a view to restart production as soon as possible,” Honda said.

It is looking at other arrangements such as air freight.

Congestion at UK container ports has been building up in recent weeks, causing problems initially at Felixstowe, but recently at Southampton and London Gateway as well.

The backlog has built up as companies increased orders after the initial pandemic lockdown, while some have looked to stockpile goods before the end of the Brexit transition period.

Problems at the UK’s container ports have been building up for weeks. Businesses have been complaining about consignments being delayed, or even ending up on the wrong side of the channel. Now a major manufacturer has admitted production will be disrupted.

So what’s gone wrong? Issues at Felixstowe, Britain’s biggest container port have been evident for some time – blamed by hauliers on a vehicle booking system that they claimed simply didn’t work, preventing them getting into the port.

The Covid outbreak has also caused problems – which were exacerbated when thousands of containers of PPE imported on behalf of the government were simply left within the port for weeks, adding to the gridlock. And after the lockdown in the first half of the year, the volume of goods being imported has been much higher than normal.

Congestion at Felixstowe has pushed more container traffic to Southampton and London Gateway – and now the situation in both of those ports is also reportedly getting worse. Honda is looking at air freight to ease its supply problems. The chances are other businesses may have to do the same.

Congestion at England’s ports is now so bad that some shipping firms have limited the amount of cargo they will bring to the UK.

Consignments have reportedly been offloaded at continental ports such as Antwerp, Rotterdam and Zeebrugge.

In a statement, Honda said: “Honda of the UK Manufacturing has confirmed to employees that production will not run on Wednesday 9 December due to transport-related parts delays.”

Castle Donington-based motorbike manufacturer Norton is set to launch its first new models since it was bought out of administration earlier this year.
The V4RR will be unveiled next year.

Norton says the new marque is “the TT racer reborn”. It will be made at the firm’s Castle Donington manufacturing plant.

Norton says the V4RR has been developed on the world’s toughest racetrack in the Isle of Man, and boasts a “pristine, hand-built finish and second-to-none handling”. The new bike will feature a 1200 cc V4 engine and 200 bhp.

Meanwhile, the new V4SS will be limited to just 200 bikes and will be available from the end of the year. It too has been developed at the Isle of Man TT circuit and features a new 1200cc, 72 degree V4 engine and race-developed front and rear shocks.

Norton CEO John Russell said: “It’s up to us now to create the real potential to unlock this brand and deliver that potential long term.

“Much of what we’re working today so intensely is invisible to our customers and our enthusiasts but at the heart of what we’re doing is this bike [the V4SS], which is the first one that is available from the new Norton at end of this year.”

Earlier this year, Norton was bought out of administration for £16m by Indian firm TVS Motors. acquisition?utm_source=newsletter&utm_medium=email&utm_campaign=EastMidlan ds_26th_Nov_2020_Daily


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