Schmitz Cargobull
Europe’s largest trailer manufacturer, Schmitz Cargobull, reports that the company has taken comprehensive protection measures at all its production plants to ensure that vehicle deliveries can continue as smoothly as possible during the pandemic.

Adjusting to the market

June 12, 2020
Fall in European trailer demand, production is anticipated in second, third quarters of 2020

Clear International recently updated its forecasts for the European Trailer Market in light of the COVID-19 pandemic that peaked in April in many European countries.

Trailer manufacturers closed their businesses in April in order to comply with government recommendations on social distancing, but also because “there was little or no business to be done,” Gary Beecroft, managing director of CLEAR International, notes in the report.  

As a result, manufacturers are reconsidering how they can resume production to at least meet the low level of demand that will exist in the second quarter this year.

In January and February, the trailer market was on course for a 14% fall in demand in the first half of the year, in line with the CLEAR forecast. By March, however, it was plain that the COVID-19 impact was going to be “much more severe than anticipated,” the report says. CLEAR now forecasts a fall of 23% for the first quarter and 42% for the second.

“At the moment it is assumed that there will be something of a recovery in 2020 Q4, but there is a significant danger of this failing to materialize if there is a second wave of COVID-19 infections combined with further restrictions on businesses and their employees,” Beecroft says.

Inevitably, the report adds, comparisons are being made to 2009 when trailer demand fell by 51% in Western Europe and it took until 2015 for demand to return to trend level. GDP fell by 6% in 2009 and some forecasts are indicating the impact could be equally as bad in 2020, with the worst of the impact occurring in the first half of the year.

“However, there are scenarios suggesting that if the virus is not brought under control then the fall in GDP could be as much as 12% if extended lockdowns are brought back into force,” Beecroft says. “Under the more optimistic scenario, we can expect a minimum fall in trailer demand of 26%, and under the more pessimistic outlook a fall of more than 50% is possible in 2020.”

The European economy is totally reliant on road transport for the delivery of goods. Some sectors of the transport industry are protected by the need for basic provisions such as food, fuel and pharmaceuticals. However, other sectors are affected by the general disruption of business activity caused by the virus. Nevertheless, the demand for road transport fell by 14% from 2009 to 2013. As a result, demand for new trailers was pegged at a low level during that period, the report explains.

“To escape this fate from, say, 2020 to 2022, it seems likely a vaccine may be the only solution that will allow a V-shaped dip in economic activity, which would enable a rapid return to normal levels of road transport and new trailer demand,” Beecroft says.

The report notes that 77% of all goods in Europe are moved by road and most of that proportion is transported in a trailer.

CLEAR International is a consulting group working with companies active in automotive and transport markets. Projects focus on the future demand for products as a result of changes in technology, markets, business processes and legislation. Clients include component manufacturers, vehicle manufacturers, investment banks, management consultants, materials producers and government bodies. 

The West European Trailer Market Report (February 2020), with forecasts to 2024, can be obtained from CLEAR by contacting Beecroft by telephone (+44 20 8892 8379) or email ([email protected]). A new report for the East European market was issued in March 2020. A Global Trailer Market Database also is available.