UK production of commercial vehicles (CVs) declined 31.5% in January with just 5,616 units leaving factory gates, according to data from the Society of Motor Manufacturers and Traders (SMMT).
"The ongoing impact of the coronavirus pandemic, friction in trade with the EU following the Brexit deal and weak demand all affected output, resulting in a fourth consecutive month of decline and the worst start to the year since 2015," SMMT said in a statement.
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Manufacturing remained subdued for both domestic and overseas markets, down 28.8% and 33.6% respectively, with demand from most export markets falling, including the EU, the largest market. Over half (53.2%) of the CVs made were exported.
SMMT chief executive Mike Hawes said: "After a sharp fall in CV production last year, it's disappointing to see output fall again at the start of 2021. With so many jobs at stake and a real need to secure investment for this essential sector, next week's budget [government financial plan] is an opportunity for the chancellor [finance minister] to deliver a shot in the arm to the industry.
"We need the right conditions that will boost business confidence and address depleted order books across the industry, which means an extension of the [COVID-19] furlough scheme, a review of business rates to incentivise manufacturing investment and improved fiscal measures to support uptake of the latest alternatively fuelled commercial vehicles."
Reflecting both reduced car and CV output last month, UK engine production also fell, by 29.3% to 168,291 units with domestic and export volume off 27.2% and 30.8% respectively.
Hawes added: "It has been an extremely challenging start to the year for UK engine manufacturers who have seen their output severely dented by the ongoing pandemic, a subdued market, and border friction following agreement of the UK/EU trade deal. While there is a roadmap out of lockdown, the sector still faces multiple headwinds and so the budget is an opportunity to enhance the industry's competitiveness and ensure that the UK's skilled engine building workforce is part of the future of the sector as it transforms to electrified powertrains."
