West European trailer industry declines only slightly in 2005

Although record sales levels in the European market for heavy goods vehicle trailers in 2004 pointed towards a fall in the market in 2005, the market declined by only 2%, according to CLEAR, a consulting group working with companies active in automotive markets.

Economic forecasts for GDP, and in particular, investment growth, proved a mixed bag, with some countries improving and others worsening during 2005. In addition, given that the trailer replacement cycle is on a downturn, it is surprising that the market is performing as robustly as it is. The only support factor is the inclusion of the new East European markets in the EU, which is giving a boost to international transport.

Looking forward, 2007 to 2009 are still forecast to be record years, but with lower growth levels than in either the late 1980s or 1990s.

According to Gary Beecroft, Managing Director of CLEAR, "The biggest problem for most trailer manufacturers is their non-existent margins. Price competition is very keen, with German manufacturers in particular exporting aggressively. At the same time costs of commodities such as steel, rubber, etc have rocketed, and it is not possible in the current market to pass theses costs on to the customer."

Many of the smaller trailer manufacturers and body builders, generally family firms, have disappeared as a consequence of the squeeze on margins. To succeed, businesses need either volume, like Krone and Schmitz Cargobull, both of whom produce over 20,000 units, or a viable niche. Total trailer production in seven West European countries2

Trailer production is forecast to approach 180,000 units by 2009 in the seven markets. Exports to countries outside of Western Europe are expected to strengthen - especially to the east, helped by the new EU members. CLEAR takes the view that some economic forecasters are overly pessimistic regarding the outlook during the second half of the current decade. The major risk to the forecast is that the pessimists are proved right. A 67% rise in East European New Trailer Registrations since 2000 CLEAR has now launched a new Eastern European service to cover the fast growing market for transport assets in that region. New trailer registrations rose 67% between 2000 and 2004, but were slightly lower in 2005. The market for new trailers is currently 40,000 units, but there are a significant number of used trailers moving from the west to the east.

Trailer manufacturers are proposing a 59-ton vehicle as the future for Europe's crowded roads. It features a truck pulling two trailers - two of these combinations could replace three existing trucks, thereby reducing traffic congestion. Trucks like this are already used in Sweden and parts of the Netherlands near Rotterdam. However, the UK government has declined to permit trials but is watching developments elsewhere.

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