CLEAR has launched its latest forecast for the West European trailer market. The product covers 15 West European countries.
For West Europe as a whole, 2008 will see sales just below last year's level, despite the fact that half way through the year, large markets such as Germany, France, and the Netherlands are actually running ahead of 2007's figures.
Focusing on the seven largest West European markets, demand in 2008 is forecast up 0.2% at 172,000 trailers and semitrailers. Order books were full for the first part of 2008, but many firms are seeing orders reduced for the second half, particularly from the vehicle leasing and rental sector. Sales in 2009 are forecast significantly lower.
Measured in percentage change against 2007, the United Kingdom, Ireland, Denmark, Sweden, Finland, and Spain are set to fall. The English-speaking and Scandinavian markets are usually the first to show the effects of a downturn in the economic cycle. Mainland Europe will follow 12 months later. Spain and Ireland are suffering from the collapse of their speculative house building booms.
So what has pushed the market to this extraordinary level, and why is it sliding into decline in 2009? The principal factor is the economic cycle, which sees low growth in the first half of each decade and high growth in the second half. However, in this decade it seems that the market has peaked rather early.
One reason for this is that the new EU countries admitted since 2004 have been sucking in used vehicle imports at a high level. That means West European transport firms have been able to renew their vehicle fleets early. It is claimed in some quarters that three-year-old vehicles belonging to large fleets have been replaced with new vehicles at next to no costs. That is because large fleets use their buying power to negotiate low prices on new vehicles, while their remarketing arms are getting attractive prices for their used trucks and trailers.
There is an ever growing demand for transport, and EU enlargement has stimulated this further. Recent attempts to introduce longer truck/trailer combinations that would have reduced the overall number of vehicles on the road received a serious setback when German politicians rejected their introduction, and the British government has decided not to allow even a restricted trial. This could scupper their adoption in the rest of Europe. With rail, air, and water transport unable to offer either a cost- or time-efficient alternative, there will be a need for more trucks and trailers on the road.
Germany, which has the largest border with new EU countries, has benefited most from this development. It produces more than half of the trailers made in the Western Europe and supplies most of the used and new trailers sold in the East. As a result its exports have rocketed, resulting in a production level more than four times that of its nearest European rival, France.
The U.S. sub-prime issue will probably result in some loss of business confidence for 2008, leading to reduced investment and fewer new vehicle sales. However, CLEAR believes economists are overpessimistic for the short term but over-optimistic for the medium term, say 2010-2012.
The West European Trailer Market Report (July 2008) can be obtained by visiting http://web.onetel.com/~gbeecroft/, or phone +44-20-8892-8379.