West European Trailer Market To Fall 18%
Mar 2, 2009 12:45 PM
Consulting group CLEAR projects an 18% decline in the West European trailer market and a 22% production decline for 2009 – a $2billion loss of revenue for the transport market.
In 2009, demand for trailers will be down 37,000 units and the decline in production will be 61,000.
In Europe, the demand for trailers and other transport equipment held up well for the first three quarters of last year. However, the last quarter was catastrophic, with demand down 40% in many countries compared to the same period of 2007.The outlook for the first part of 2009 looks similar.
However, on the production side the figures are even worse. With demand at record levels in 2007, the trailer manufacturers and their suppliers invested in new production capacity. Even as demand and particularly orders dropped off, there was a reluctance not to use this investment to churn out vehicles, with the result that massive stocks built up – stocks which now have to be sold before production can resume at more “normal” levels. In many cases, production levels at factories have dropped to half the level of the previous year.
With the market for trailers having been strong for several years, many transport firms have lots of new equipment, which they can easily forgo renewing for a year or two. Therefore, manufacturers of trailers are reliant on replacement demand from that part of the vehicle fleets which is too old to be operated economically.
“Trailer manufacturers and their suppliers have to survive this period until demand and production stabilize at a new lower level,” said Gary Beecroft, managing director of CLEAR. “Unfortunately that will be at the 2004 level. The full economic impact of this slowdown has yet to be seen. It will be the end of 2010 before we see any growth in equipment demand.”
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