Strong global growth in truck sales has resumed
At the J.D.Power Global Automotive Outlook Spring Conference in London, Zita Zigan, Head of Global Commercial Vehicle Forecasting, told delegates that the strong global growth in truck sales, so evident before the economic crisis, has resumed.
Last year saw a post-recession record as sales of trucks over six tons rose to 2.5 million units, an increase of 38% year-on-year. Zigan forecasts sales to rise further this year to 2.6 or 2.7 million units and predicts continuing growth over the next five years, albeit at a slower rate.
The recovery has been strongly dependent on emerging markets, especially China, but in 2011, Zigan sees the Triad markets of the US, EU and North America outgrowing the BRICs, Brazil, Russia, India and China, as China and India lose momentum. Here are her forecasts by region for trucks over six tons. Figures are in thousands.
| Region | 2009 | 2010 | 2011 | 2012 |
| EU | 215 (- 46%) | 232 (+8%) | 290 (+25%) | 356 (+23%) |
| Other Europe | 56 (-64%) | 105 (+86%) | 147 (+41%) | 162 (+10%) |
| North America | 248 (-36%) | 272 (+10%) | 377 (+38%) | 463 (+23%) |
| Latin America | 116 (-16%) | 178 (+54%) | 187 (+5%) | 153 (-18%) |
| Asia | 1147 (+6%) | 1677 (+46%) | 1621 (-3%) | 1570 (-5%) |
| Rest of World | 29 (-39%) | 34 (+19%) | 35 (+3%) | 42 (19%) |
| Global Total | 1811 (-18%) | 2499 (+38%) | 2657 (+6%) | 2747 (+3%) |
In the EU the export-led industrial recovery has boosted business confidence and truck orders and selling rates have responded. The outlook for EU truck production is as follows.
Figures in thousands.
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 |
| 203 | 321 | 402 | 499 | 591 | 585 |
The decline in build bottomed out in mid-2009 and the first quarter of 2010 saw the sixth and final quarter of year-on-year decline. The near-term production outlook for 2011 sees a flat first half-year with a strong second half.
In North America, the economy is growing and truck supply and freight demand are closely aligned. Truckers are once again making money although driver supply is tightening. The price of used equipment is rising but the fleet, according to Zigan, is ancient as excess Class 8 capacity dries up. This will lead to a need to replace some trucks, which is good news for the manufacturers. Zigan’s forecast for Triad production are as follows. Figures in thousands.
| 2010 | 2011 | 2012 | 2013 | 2014 | |
| Canada | 6 | 10 | 11 | 12 | 13 |
| Mexico | 85 | 107 | 132 | 136 | 137 |
| USA | 182 | 296 | 333 | 366 | 331 |
| NAFTA | 273 | 412 | 475 | 515 | 481 |
In Japan, the impact of the earthquake and tsunami will mean that Japanese truck production will be severely hit with the main effects seen in the first half of this year. Production forecasts have been slashed but we can expect a near-term rise in sales due to vehicle replacement needs and the reconstruction effort.
In China, 2010 saw record growth with sales and production increasing by 45% largely due to government stimuli and a focus on infrastructure investment. Zigan forecasts that the market will plateau this year. The fact that State IV emissions will not be enforced until 2012 will have the effect of pulling sales forward into 2011 but the underlying demand drivers are slowing and there will be a market correction by 2012 at the latest.
Russia also saw a truck market recovery last year as industry rebounded and the oil price increased. Truck sales were up by 83% in Russia and output in the CIS countries rose by 42%. Truck sales and production of indigenous models are likely to receive a strong boost this year thanks to the impact of government scrappage schemes and CIS output is expected to grow by over 50%. Once again, however, a market correction is likely in 2012.
The situation in Brazil is broadly similar with 2010 sales up 51% and production rising by over 56%. Tax incentives and a financing scheme have provided an extra boost to demand. According to Zigan, growth will continue this year with the new emission standard in 2012 expected to pull sales forward. Again, there will be a market correction in 2012.
Last year also saw robust growth of the truck market in India with sales rising to 313,000 units from 196,000 in 2009. Once again, this was due to economic recovery and the pulling forward of sales in advance of the implementation of new emission standards. There was also a boost due to the National Highways Development Project. The demand is expected to ease this year because of the payback period in the wake of the emissions change and also the surging oil price. The government budget will provide some offset with strong government spending and financing for agriculture and housing.
In summary, Zigan said that North America and Europe will drive global volumes as the recent BRIC dynamism is set to ease, particularly in China and India. The global impact of the Japan earthquake will most likely be limited but market risks include the surging oil price and the instability in North Africa and the Middle East.