In the seven largest West European markets for heavy truck trailers, 2007 demand is forecast up 17.4% at 173,000 trailers and semi-trailers.
Order books are full for the first part of 2008. Although sales in 2008 and 2009 are forecast to exceed the previous record year, which was 2006, they are on a downward trend.
The principal factor in the growth 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 of the reasons is that the new EU countries admitted in 2004 have been sucking in used vehicle imports at a very high level. That means that West European transport firms have been able to renew their vehicle fleets early.
In fact, 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 the large fleets use their buying power to negotiate low prices on new vehicles, while their re-marketing 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 trucks in Europe that would have reduced the overall number of vehicles on the road received a serious setback when German politicians rejected their introduction, which could affect 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 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.
“It is a period of record sales and record uncertainty,” said Gary Beecroft, managing director of CLEAR. “Those companies that invested at the top of the market in the last economic cycle came severely unstuck.”
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 is of the opinion that economists are over-pessimistic for the short term but over-optimistic for the medium term (2010-2012). According to Beecroft, “The last two decades have started with a slow down - next decade will be the same, but with the slow down coming a little earlier.”