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TRUCKING MARKET COMMENT * USA - Present Tense, Future Imperfect.
Things do look very nasty indeed.USA -Road Transport (UK) -12 Oct 2007: -- US Class 8 trucks sales have fallen for the fifth month in a row, and, in September, the units sold – 9677 – represent a 58.8 per cent decline over a year ago – when 23499 units changed hands... During the first nine months of 2007, 116,853 Class 8 trucks have been sold, down 44.3 per cent from the 209,938 units sold during the first three quarters of 2006... There seems to be a larger picture playing out here. On the one hand, it is very difficult to postpone the replacement cycle indefinitely. Sooner or later, US truck operators will have to begin to buy EPA 07 compliant vehicles. Indeed, when the issues surrounding SCR are clarified, it would seem – should everything else remain equal - entirely probable that there will be a rush towards pre-empting the EPA 10 deadline with EGR-equipped vehicles... But the market is still dead... Granted, legislation has created a cyclical market within the Triad – pre-buying ahead of new legislation is mirrored by a downturn after it has been imposed. But legislation itself does not drive the US truck industry. What underpins it is demand for the services of those trucks, and that can only come from the economy at large. If the US economy shrinks next year, then so, logically, will demand for trucks. There will be some positive movement courtesy of the replacement cycle, but, on balance, we believe that any recovery will be muted at best... How long can the truck industry sustain this downturn? Can it afford to retain capacity prior to a pre EPA 10 upturn? We don’t know, but we do know that any attempt so to do is going to cost. That’s another hit on OEM and supplier margins, and so a vicious circle develops. And, the more exposed the OEM to the US market, the more it's going to hurt. Whither Navistar and Paccar, we ask... ("Virtual Trucks" from: www.digitalmasters.com.au)
posted by Unknown @ 8:27 PM
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