And thus begins 2013.
For the global truck market, this has all the makings of a year to be endured as opposed to celebrated, and if joy truly does cometh in the morning, we have a long night ahead of us.
Europe should be on fire: Euro VI is now under a year away, and sentient fleet operators should be buying trucks – but they’re not. By the end of November, EU+EFTA HD registrations were down 8.6% and seemingly gathering a southerly momentum. Add to this reported significant discounting, and we have a scenario that is beyond analysis from a purely truck market perspective. Clearly, the economic travails of the European experiment are weighing heavily upon buyers’ minds, and they are, not unreasonably, exercising (extreme) caution, and performance in 2013 looks set to be flat to -5% at best. A recent Goldman Sachs note opined that “…. the Euro crisis is set to evolve from acute to chronic.” Drag a car wreck to the side of the road, and the situation has evolved..but it’s still a car wreck.
Europe should be on fire: Euro VI is now under a year away, and sentient fleet operators should be buying trucks – but they’re not
To North America, and the vexed question of replacement versus growth. December order intake was surprising – almost suspiciously so – and once again, the trading landscape is bathed in an optimistic light. But how many more trucks need to be bought? The oft-repeated charge that the US truck fleet is aging now seems a rather tired one: the relevant truck fleet – that operated by the majors, and that which is responsible for actually moving freight – looks positively youthful. North America’s own macro challenge – Fiscal Cluster v2, the expiration of the debt limit in early March and the threat of a government shutdown after 27 March – has to weigh on sentiment, and if that sentiment is ambivalent to start with – because the necessary trucks have already been acquired – then it is difficult to feel the wind at one’s back. 2012 build came in at around 270,000 units, and it’s hard to see a rational argument for a 2013 build anywhere near these levels. 210,000 units may sound very pessimistic, but it is also a reflection of the new reality, which sees fewer trucks moving freight more efficiently. Time to get used to this.
And what about the BRICS?
Alcoa sees China truck growth at between 12-20% during 2013, but China GDP forecasts for 2013 provided by China Real Time fall between 7.4-8.6%. China is a market characterised by opacity, but even so, the high end of the Alcoa forecast seems, well, high. News that Ashok Leyland saw total sales dip by 19% in December augurs badly, while Tata’s four-year warranty offering on HD product could be construed as an exercise in pricing to sell. India’s SIAM sees M/HCV growth as flat to 2% for this year.
We’re just days in 2013, and much may yet happen to change things. Or not. For the truck market generally, aspiring to mediocrity seems a sensible course to plot
Brazil began to pick up in Q3 2012 following the Proconve 7 prebuy in 2011, and the truck industry has dodged a bullet in terms of IPI. While the World Cup may provide something of a tailwind, the heady days of 2011 seem some way off. Russia still looks to be all about the oil: below US$110/barrel, and things look shaky. Forecasts (Deutsche Bank) for US crude for 2013 now point to an average price of US$96.25. It’s not too difficult to reign in enthusiasm here.
We’re just days into 2013, and much may yet happen to change things. Or not. For the truck market generally, aspiring to mediocrity seems a sensible course to plot. Headwinds abound.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
Oliver Dixon is Editor, World Truck Analysis
The AutomotiveWorld.com Expert Opinion column is open to automotive industry decision makers and influencers. If you would like to contribute a Comment article, please contact editorial@automotiveworld.com
