It would be a "disaster" for the commercial vehicle industry if the UK crashed out of the EU in 2019 without a good trade deal with the remaining EU27 countries, SMMT chief executive Mike Hawes has warned.
"The automotive sector has taken advantage of the single market more than any other industrial sector in the way manufacturing is integrated and there is free movement of goods without tariffs or paperwork," he said. "That takes cost out and anything that puts cost into the process will have to be passed on which would depress demand or the manufacturers absorb it and see their margins dissipate. To be be out of the EU without a deal would be a major challenge for the industry."
Even before we see the final shape of Brexit, Hawes cautioned about economic headwinds that might blow a so far buoyant CV market off course.
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"The CV market is still at a relatively high level," he said. "But since the Brexit referendum economic conditions have changed - the pound has depreciated, consumer confidence has declined and while the economy is growing it is not as rapid as some of the other OECD countries. I am not talking down the market - there is still growing demand for online retail and that requires more CV movements."
Emissions uncertainty
Another concern that could dampen CV demand is uncertainty over emissions and direct vision standards that might be required by various cities under the government's clean air strategy.
"The government published its national framework last year which we supported," said Hawes. "Undoubtedly there is a degree of uncertainty because they are passing certain measures to local authorities. The danger is that the ability of a city to operate could be questioned if businesses can't get deliveries.
"We are trying to get a sensible proposal out of London on direct vision because the economies of scale don't allow manufacturers to make a London variant."
OEMs at the CV Show
While Iveco supports the CV Show through its dealers Guest and Sherwood, and most of the major van manufacturers are here at the NEC, MAN Truck & Bus is the only truck manufacturer to have a stand at the 2018 event. The vehicle manufacturers' association the SMMT owns a third of the CV Show, so why don't more of them support the event?
According to Hawes the pan-European truck makers face tough choices on where to spend their marketing budgets.
"We have more competition in the even years as there is a Hanover show," he said. "It also depends where the manufacturers are in their model cycles and when they were introducing Euro-6 they were all here. Finally there are different ways to spend the marketing budget and it is an increasingly competitive environment.
"But the show is virtually sold out with the same number of exhibitors as last year and visitor registrations are the same as last year. So we are pleased with this result."
Could the CV Show go biennial in years when there was no Hanover show?
"The problem is getting all the manufacturers to agree which year to do it in," said Hawes. "Logically it would not be the Hanover year but this year we are 99% sold out so there is demand for an annual event."
