Commercial Truck Equipment Industry generally more optimistic
Apr 1, 2010 12:00 PM
NTEA members are generally much more optimistic now than they were a year ago, according to a January survey of over 200 companies. But plenty of changes are expected that will present both challenges and opportunities.
The session titled “State of the Industry Overview — the NTEA Perspective” featured views on where the US truck equipment industry is today, where it appears to be going, and how global and regulatory changes might impact it.
The panel consisted of Jim Carney, NTEA executive director; Tim Campbell, managing director of Campbell CV Marketing Group in the United Kingdom; and Mike Kastner, NTEA's senior director of government activities.
As part of his presentation titled “Finding the New Normal” Carney reported the results of a recent NTEA member survey. He said that 65% of the respondents believe business conditions will improve, compared to 29% a year ago; 8% think business conditions will decline, compared to 40%; 60% have lower employee levels than a year ago, compared to 70%; 68% report they have a backlog, improved from 59% a year ago (although the number of backlog days has shrunk); and 12% reported aggressive strategies, up from 7% a year ago.
Other results:
91% think that consolidation will continue.
54% think chassis supply will be a major issue as business improves.
58% report working at less than three-quarters of their plant capacity, with only 3% reporting full capacity.
“As we start to see sales rebound, capacity's going to be a big issue,” Carney said. “It will create a lot of competition. People want to fill their capacity. They want to fill their plants, so they will be more competitive about pricing.”
He said there are a number of economic issues and short-term keys for a work-truck industry rebound:
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Fuel prices
Carney pointed out that truck sales plummeted when the price of crude oil exceeded $100 a barrel in 2008, and we expect a similar response under similar conditions. “People just jumped off the pickup bandwagon,” he said. “This is something we have to watch. Fuel prices will increase over the next five years.”
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Consumer spending/employment
“This is a key driver of pickup, van, and truck sales. It extends across the commercial vehicle range. Spending has to improve before truck sales improve. This is projected to not happen until late in 2010.”
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Housing market
“It hit its lowest level since they started collecting stats. It continues to deteriorate. Commercial construction makes up 30% of work-truck sales. State and local governments are starting to cut their budgets as unemployment numbers take effect. Land values are reduced.”
Long-term questions:
Next Page: Fleet vehicle utilization and purchasing
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