While the threat posed by COVID-19 has declined, the war in Ukraine and the cost of energy plus general price inflation have replaced the virus as the principal threats to growth in trailer demand, according to the forecast for the West European heavy trailer market by CLEAR International.
And economic forecasts for Western Europe have already taken a hit. As a result, trailer demand in 2023 and subsequent years has been scaled back by more than 4,000 units.
In contrast, the final 2022 projection has improved, with trailer demand remaining somewhat insulated from the impact of the war in Ukraine.
Economic forecasts for 2023 have been downgraded in every country, the “most significant change” since the last forecast in May, though the impact on the 2024-26 period will be “less pronounced,” noted Gary Beecroft, CLEAR director.
“A slowdown in trailer demand in 2023 was forecast over two years ago,” Beecroft said. “However, the war in Ukraine will result in at least a technical recession in many European countries. Inevitably this will lead to a larger decline in trailer demand in 2023, and to a lesser extent, in subsequent years.”
Similar to the challenges in the U.S. market, increased costs caused by high inflation combined with some continued problems with sourcing vehicle parts are making manufacturing difficult.
A European war plus a difficult economic situation “cannot help but dent business confidence” and reduce companies’ willingness to invest in new transport equipment, the report continues.
CLEAR anticipates 6.7% growth of trailer demand by the end of 2022. Considering the issues faced by the industry, this would be “a reasonable outcome.” However, a significant fall in demand is assured in 2023, dropping trailer demand below the level of 2021.
Subsequent growth in the forecast period will eventually bring sales back to that of 2019, but not until 2025.
There will be a decline in exports of trailers to Eastern Europe affecting 2022 and 2023 as well. This will have a disproportionate impact on German trailer builders who are the largest exporters.
The forecast period from 2022 to 2026 will be a time of declining replacement demand for trailers, a result of low trailer registrations in the 2009 to 2014 period, per the report.
Therefore, the forecast growth in trailer demand will call for significant levels of investment in new trailers over and above the replacement level.
The European market reports and forecasts can be obtained from CLEAR by contacting Gary Beecroft by email at [email protected]. A Global Trailer Market Database is also available from the consulting group.