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Executive Summary

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EXECUTIVE SUMMARY

During 1999, the UK commercial vehicles industry produced 247,600 vehicles, a fall of 1.5 percent on 1998. This represents the continuation of a decline which began in the late 1980s when, faced with a depressed economy and falling demand, the industry entered a period of unprecedented restructuring. As a result, almost all of the UK's commercial vehicle manufacturers are now foreign owned. Owing to the increasingly global nature of the industry, many commercial vehicle manufacturers now operate on a pan-European basis, with the consequence that production has been shifted from the UK to continental production centres which enjoy the benefits of lower costs.
Following a similar pattern to that of production, the number of vehicle registrations fell by 0.9 percent to 279,600 units. One of the principal trends in registrations has been that an increasing proportion is derived from imports, which now account for 57.8 percent of all new commercial vehicle registrations.
The commercial vehicles market can be divided into two main sectors. By far the largest of these, in terms of both production and registrations, is light commercial vehicles (LCVs) -- vehicles weighing less than 3.5 tonnes. The other main sector is that of heavy goods vehicles (HGVs) -- vehicles weighing more than 3.5 tonnes. Buses and coaches comprise a small, specialist segment, representing 6.3 percent of HGV registrations in 1999.
One of the most important themes in recent years has been the growing number of collaborations between manufacturers. This has been brought about by the huge costs and investment required to design and build commercial vehicles, particularly those of higher weights. Many of these agreements involve simple `badge re-engineering', whereby one manufacturer adds refinements to a basic model created by another manufacturer. Many companies have also entered into collaborations to extend their vehicle portfolios.
Environmental legislation is another factor which has affected commercial vehicle demand throughout much of the 1990s. In particular, European Union (EU) Euro 2 legislation resulted in a sudden increase in new vehicle registrations during 1996, as operators sought to register vehicles before the new laws came into force. Euro 3 legislation comes into force in 2000. However, new EU legislation will allow member states to offer tax incentives to smooth the transition between Euro 2 and Euro 3 vehicles.
The outlook for the commercial vehicles industry in the UK is mixed. Registrations should show a moderate improvement to 2004, owing to the continued buoyancy of the economy and a number of new model launches in the HGV sector over the next 2 to 3 years. However, more importantly for domestic manufacturers, production is expected to continue to fall. Contributing to this decline are the UK market's vulnerability to increased vehicle imports and the strength of sterling, which will continue to constrain the competitiveness of companies exporting vehicles overseas.

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TABLE OF CONTENTS

Executive Summary

Market Definition

INTRODUCTION

MARKET SECTORS

MARKET POSITION

MARKET TRENDS

Table 1: Car and Commercial Vehicle Registrations (000), 1995-1998

Table 2: Western European Commercial Vehicle Registrations (000), 1988-1999

Table 3: Number of Licensed Goods Vehicles Over 3.5 Tonnes (000), 1988-1998

Market Size

TOTAL MARKET

MARKET SECTORS

FOREIGN TRADE

Table 4: Commercial Vehicle Registrations (000), 1995-1999

Table 5: Commercial Vehicle Production and Exports by Weight (000 and percent), 1995-1999

Table 6: LCV Registration by Weight (000 and percent), 1995-1999

Table 7: HGV Registration by Weight and Axle Configuration (000 and percent), 1995-1999

Table 8: UK LCV Imports, Exports, Production and Registrations (000), 1995-1999

Table 9: UK HGV, Buses and Coaches Imports, Exports, Production and Registrations (000), 1995-1999

Industry Background

RECENT HISTORY

INDUSTRY CONCENTRATION

EMPLOYMENT

TRADE ASSOCIATIONS

Competitor Analysis

THE MARKETPLACE

MARKET LEADERS AND THEIR BRANDS

ADVERTISING AND PROMOTION

Table 10: Registrations of UK Commercial Vehicles by Manufacturer by Sector (000 and percent), 1998 and 1999

Table 11: LCV Penetration by Source ( percent of new registrations), January to June 1999

Table 12: HGV Penetration by Source ( percent of new registrations), January to June 1999

Table 13: Main Media Advertising Expenditure on LCVs (£000), Year to June 1999

Table 14: Main Media Advertising Expenditure on HGVs (£000), Year to June 1999

Strengths, Weaknesses, Opportunities and Threats (SWOT)

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Buying Behaviour

CUSTOMER PROFILE

Table 15: LCV Registrations by Region ( percent), 1997-1999

Table 16: HGV Registrations by Region ( percent), 1997-1999

Outside Suppliers to the Industry

COMPONENT SUPPLIERS

ROAD NETWORK

Table 17: Local Authority Capital Expenditure On Roads (£m), 1993/1994-1997/1998

Current Issues

ENVIRONMENTAL ISSUES

FUEL TAX

CORPORATE ACTIVITY

Forecasts

FUTURE PROSPECTS

MARKET FORECASTS 2000 TO 2004

Table 18: Forecast UK Commercial Vehicle Registrations (000), 2000-2004

Table 19: Forecast UK Commercial Vehicle Production (000), 2000-2004

Company Profiles

INTRODUCTION

DEFINITIONS

FURTHER INFORMATION

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

HOPPENSTEDT BONNIER INFORMATION SOURCES

GOVERNMENT PUBLICATIONS

OTHER SOURCES

Text © 1999 Key Note

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Last updated by Jacob van Eldik 22th January 2000