$2 billion loss of revenue for the transport market

18% fall in the West European trailer market plus 22% production decline forecast for 2009 – a $2 billion loss of revenue for the transport market.
If the figures above don’t look serious enough then they can be expressed in the number of vehicles.  In 2009 demand for trailers will be down 37,000 units and the decline in production will be 61,000.  The production figure is so much larger as Western Europe is a huge exporter of trailers.  In money terms that’s €1.5 billion or in dollars almost $2.0 billion in lost revenue.
In Europe the demand for trailers and other transport equipment held up well for the first three quarters of the year.  However, the last quarter was catastrophic with demand down 40% in many countries compared to the same period of 2007.  The outlook for the first part of 2009 looks similar.
However, on the production side the figures are even worse.  With demand at record levels in 2007 the trailer manufacturers and their suppliers invested in new production capacity.  Even as demand and particularly orders dropped off, there was a reluctance not to use this investment to churn out vehicles, with the result that massive stocks built up – stocks which now have to be sold before production can resume at more “normal” levels.  In many cases production levels at factories have dropped to half the level of the previous year.
With the market for trailers having been strong for several years many transport firms have lots of new equipment, which they can easily forgo renewing for a year or two.  Therefore manufacturers of trailers are reliant on replacement demand from that part of the vehicle fleets which is too old to be operated economically.
Gary Beecroft, managing director of CLEAR said “Trailer manufacturers and their suppliers have to survive this period until demand and production stabilise at a new lower level.  Unfortunately that will be at the 2004 level.  The full economic impact of this slowdown has yet to be seen.  It will be the end of 2010 before we see any growth in equipment demand.”

Source: Transportweekly