So, US Class 8 came in at 22,500 units in October. Very good, but don’t hold your breath: those analysts that are pessimistic regarding US Class 8 prospects remain exuberant. But what about Europe?
It rather depends who you listen to. According to Paccar, demand should rise as a result of a Euro VI pre-buy, although a band of 210-250,000 units, as voiced during its earnings announcement, is a rather broad guess. According to analysts, this represents a likely growth rate of up to 16%.
[quote align=”center” color=”#999999″]Looking at Eurozone PMI, it’s hard not to side with the European pessimists. Across the region, PMI came in at an aggregate 45.4 in October, and, notwithstanding current macro issues, the rate of contraction increased in three of Europe’s key truck markets – Germany, Italy and Spain
If the sun is shining in Bellevue, it is conspicuous by its absence in Munich. MAN, which saw operating profit plummet year-on-year from €321m in Q3 2011 to €185m, is planning not just a production stoppage from 21 December through to 11 January 2013, but is also actively considering applying for assistance through Germany’s Kurzarbeit short-time working scheme. Volvo is expecting zero growth in the European HD market during 2013 while, according to Scania, “order bookings in September continued at the same low level in many markets, affected by lower economic activity and hesitancy among customers to invest in new vehicles. This is despite a growing replacement need in Europe, given the low truck deliveries in recent years.”
Over in Turin, the cloud-base is similarly low, with Iveco blaming “further economic deterioration in most major European markets and temporary weak market conditions in Latin America.” And there’s little optimism at Daimler: “We do not expect support from the macroeconomic and market environment in general, or from the European passenger car and truck markets in particular,” opined Chief Financial Officer, Bodo Uebber. They can’t all be right.
[quote align=”center” color=”#999999″]There should be a pre-buy ahead of Euro VI, and there probably will be some slight uptick towards the second half of 2013. But are things looking buoyant? Absolutely not
Looking at the Eurozone Purchasing Management Index (PMI), it’s hard not to side with the European pessimists. Across the region, PMI came in at an aggregate 45.4 in October, and, notwithstanding current macro issues, the rate of contraction increased in three of Europe’s key truck markets – Germany, Italy and Spain. For good measure, UK manufacturing PMI also gathered pace in a southerly direction, coming in at 47.5, seemingly still firmly anchored to a downward trend. Sweden, also outside the Eurozone, saw factory activity fall at its fastest rate in more than three years in October, with PMI at 43.1. These are not happy numbers. They are not the sort of numbers that offer any confidence in a buoyant truck market. Nor for that matter do those put forward by Ifo, the UK CBI or Eurostat.
There should be a pre-buy ahead of Euro VI, and there probably will be some slight uptick towards the second half of 2013. But are things looking buoyant? Absolutely not. And while we can continue to cite appropriate statistics, it’s less easy to argue with CAPEX intentions. One major UK fleet – a well-funded cash buyer – budgeted £35m (US$56m) in 2012. For 2013, that figure is £17m. The sun may be shining in Bellevue, but perhaps only through a gap in the storm clouds.
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
