IAA is probably the most significant commercial vehicle trade show anywhere on earth, and so anyone visiting might expect a number of themes to emerge.
No disappointment on that basis at IAA 2012. Two themes are readily apparent, but they are both located in one source: Euro VI. Due to come into force in January 2014, it’s an item of legislation that has been occupying the waking thoughts of the European truck industry for some time now.
Theme one is easy: supply. The Euro VI cards have been dealt, the major OEMs have all played their hands, and everyone at the table will be sitting in. The OEMs say they are on top of things, and so, from a supply side, the landscape looks clear. Euro VI calls for new product, and there was plenty of it on show in Hanover, including MAN‘s new Euro VI engine, the new DAF Euro VI XF, the award-winning Iveco Stralis Hi-Way and the first public outing for Volvo‘s new FH. Daimler used the event to display almost its entire global CV product range for the first time in Europe.
Euro VI calls for new product, and there was plenty of it on show in Hanover, including MAN’s new Euro VI engine, the new DAF Euro VI XF, the award-winning Iveco Stralis Hi-Way and the first public outing for Volvo’s new FH
Which brings us to demand, where the landscape in Europe is anything but clear: the European truck market seems almost impossible to call.
There’s a lot of confidence being expressed here in Hanover. But it’s a brittle confidence, and it does not appear to go much below the surface. In this, IAA 2012 is eerily redolent of IAA 2008. As the storm clouds gathered, the party line was very much one of business as usual; then Q1 2009 arrived, and it was anything but.
Is history repeating itself? Clearly the economic picture today is a different one. It’s still bad – in fact it’s shocking – but it’s different. Inventory in Europe should not prove as troublesome as it did three years ago: for that, we need to cross the Atlantic, where inventory issues are likely to become very prominent in the final quarter of the year. And, unlike 2008, Europe has an upcoming and meaningful legislative change due in 14 months. There should be a prebuy, and that should save the day.
There’s a lot of confidence being expressed here in Hanover. But it’s a brittle confidence, and it does not appear to go much below the surface. In this, IAA 2012 is eerily redolent of IAA 2008
But analysts are not so sanguine. The oft-discussed MAUT incentive – if it does arrive – looks likely to arrive too late to create a meaningful tailwind for early Euro VI adoption. MAUT skewed Euro IV and V so much that it’s almost central to the reckoning here. Unfortunately, the Germany of 2012 is not the Germany of 2005, and the simple affordability of any meaningful subsidy is questionable. Logic says the less the incentive, the greater the prebuy effect, yet there is little sign of any appetite for trucks at present. Volvo’s August data shows its YTD sales in Europe down 11%, and it’s difficult to believe Volvo is alone in its pain.
2008 revisited? It’s not clear, but things should be considerably better than they are. Couple Europe’s well-documented issues with the growing evidence from North American truck buyers (rather than sellers) of a developing horror story in terms of freight (ie truck) demand, and the only reasonable assessment that can be made is that these two major truck markets comprise one major problem.
While the comparison between 2008 and 2012 is a far from perfect one, if one looks not at the cause but the likely effect, comparisons suddenly become very clear indeed.
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 an Expert Opinion piece, please contact editorial@automotiveworld.com.
