Day: 7 July 2020

The UK’s new car market began a “tentative restart” in June, with electric vehicles continuing to increase market share, but total registrations were still down by over a third from year-earlier levels, the Society of Motor Manufacturers and Traders said July 6.

New car registrations reached 145,377 units in June, down 35% from June 2019, “as the market began a tentative restart after more than two months of lockdown” as a result of the coronavirus pandemic, SMMT said.

The drop “was an improvement on May’s minus 89.0% wipeout but…this still represented a significant decline of 78,044 compared with June 2019, as dealerships in Wales and Scotland remained closed for much of the month,” the group said.

Registrations of diesel and gasoline vehicles fell by 60% and 40%, respectively, year on year, with EV registrations rising across the board over the same period.

In June, gasoline vehicles had a market share of 60.5%, down from 65.6% in June 2019, while diesel’s market share slumped to just 15.8% from 25.6%. In contrast, battery electric vehicles accounted for 6.1% of the market, up from 1.1% a year earlier, with hybrid EVs up to 7% from 3.8% and plug-in hybrids rising to 3.4% from 1%.

“While it’s welcome to see demand rise above the rock-bottom levels we saw during lockdown, this is not a recovery and barely a restart,” said Mike Hawes, SMMT’s chief executive.

“Many of June’s registrations could be attributed to customers finally being able to collect their pre-pandemic orders, and appetite for significant spending remains questionable,” he added.

With one in five car showrooms in England remaining shut throughout June, and those in Wales and Scotland unable to open until the end of the month, “there remains some uncertainty regarding the true level of demand,” SMMT said.

“The hoped-for release of pent-up sales has not yet occurred, with consumer confidence for big-ticket purchases looking weak meaning that automotive is likely to lag behind other retail sectors,” the group said.

For the first half of 2020 the market was almost 616,000 units, or 48.5%, behind the same period last year, with some 240,000 private sales lost since the lockdown took effect, according to SMMT figures.

Year-to-date registrations of 653,502 units represents the lowest level since 1971, the group said.

— Andy Blamey

Production at Tata Steel’s IJmuiden plant in the Netherlands was back to normal on July 6 after a three-week strike ended on July 3, the company confirmed to S&P Global Platts.

The strike ended after the company said there would be no compulsory layoffs under a planned reorganization of its Dutch operations.

During the strike, some production was disrupted both in the upstream and downstream units, a source close to the company said. Tata Steel declined to provide details on it when contacted. A source close to the mill said that although some output was affected, it was a low percentage.

According to a statement sent to Platts by the company, as part of the agreement, the company’s employment pact in the Netherlands will be extended by five years and there will be no compulsory redundancies from the company’s transformation program.

Tata Steel’s Dutch management team will continue to discuss the transformation program and the resulting job losses with the local works council following a consultation process. The company confirmed that the number of jobs cuts will continue to be 1,250 units.

Henrik Adam, the CEO of Tata Steel in Europe, said, “This agreement should give our employees the confidence that Tata Steel is fully committed to building a sustainable future for IJmuiden. We share an ambition with our employee representatives to restore IJmuiden’s position as the most competitive steel plant in Europe.”

Tata Steel’s plant in IJmuiden has a design capacity of 7 million mt of crude steel a year. Tata steel Europe in total operates at around a 70% capacity utilization level, according to the company’s latest consolidated results for the quarter and year ended March 31, released early July.

Tata Steel Europe’s crude steel production declined marginally to 10.26 million mt in fiscal year 2020.

Meanwhile in the UK, Tata steel UK, part of Tata steel Europe, is still in talks with the UK government to obtain a support package, the company’s spokesman told S&P Global Platts on July 6. Market sources think that an announcement is imminent.

Last week, the UK government announced it would provide an emergency loan for steelmaker Celsa, marking the first deal under a state scheme designed to bail out companies seen as strategically important, with Celsa UK’s loan package estimated at GBP30 million ($37.39 million).

Tata UK is the largest UK steel producer with the Port Talbot blast furnace site at its heart and with designed steelmaking capacity of 5 million mt/year, though it produces around 3.5 million mt/year. Tata UK employs around 8,000 people in the UK.

Tata steel UK has asked the UK government for a GBP500 million loan, Platts reported earlier. The company and a Department for Business, Energy and Industrial Strategy (BEIS) spokesman did not provide details on this when contacted by Platts.

— Annalisa Villa

Ex-Thyssenkrupp CEO Guido Kerkhoff will become head of German steel distributor Kloeckner in 2021, Kloeckner said July 6.

Kerkhoff will replace current CEO Gisbert Ruehl who will take over the position of Chairman of Kloeckner’s digital platforms segment, which is planned to become a separate company. Ruehl held the position as CEO since 2009.

Kerkhoff has also been selected to Kloeckner’s management board effective September 1.

Kerkhoff left Thyssenkrupp in September 2019, following a “mutual” termination of his mandate after roughly a year on the job as the German engineering-based conglomerate faced pressure to accelerate its turnaround after the collapse of the merger between Thyssenkrupp Steel and Tata Steel Europe.

Ties between Ruehl and Kerkhoff were reported to be close. German media said 2019 that Kloeckner was eyeing Thyssenkrupp’s distribution unit Materials Services following market chatter that Ruehl and Kerkhoff met regularly.

Claims of a link-up were however dismissed by Thyssenkrupp at the time.

Kloeckner said in the past that they were interested in growing buy acquisition, while Thyssenkrupp hinted on the possibility of finding a partner for the Materials unit.

— Laura Varriale