The East European Trailer Market is being severely impacted by the instability in the Ukraine along with the plummeting oil price, according to consulting group CLEAR International.
Nearly 24,000 trailers have been wiped from the demand forecast for Russia for the 2015-19 period, with most of that falling in 2015 and 2016. That is in addition to the reductions made to the forecasts in 2014 following the annexation of Crimea. The latest forecast reductions affect Russia, Ukraine and Belarus.
In the second half of 2014, it was believed that the conflict in Ukraine would lessen and a solution would be found. This proved to be too optimistic. Despite a ceasefire agreement being reached, it has never been fully implemented. The low price of oil combined with international sanctions against Russia have pitched the county into recession.
As a consequence, Russia, always the largest market for trailers in Eastern Europe until 2010, has now fallen behind Turkey and Poland. Similarly the Ukraine and Belarus have been overtaken by Hungary and the Czech Republic.
Despite trailer demand falling by 4.7% in 2014 in the region, this was caused by a large drop in sales in only five countries at the same time as nine other countries enjoyed substantial growth close to 14% on average, and just below the growth level of Western Europe. A similar situation will prevail in 2015 with 11 countries experiencing modest growth.
After a strong recovery in sales in 2011 the regional has either been stalled or suffered falling trailer demand. The East European trade in goods reached an all-time high at the end of 2013, but the growth was choked off in the second half of 2014, again as a result of the situation in Russia and the Ukraine.
The economic forecast is for two years of positive GDP and investment growth in 2016/17, which will result in recovering levels of trade and more demand for road transport.
In 2016 growth in trailer demand is forecast in all fifteen countries. Further market growth in 2017 will be wholly dependent on whether a sustainable recovery is underway in Russia.
Gary Beecroft, managing director of CLEAR commented, “Despite the problems in the Ukraine and Russia, the East European trailer market can grow in 2016/17 if matters settle down during the coming months. By 2017 new trailer demand for the region will be back at the pre-recession level of 2006.”