It wasn’t panic stations among the trailer industry leaders at this year’s IAA Transportation expo. For the most part, they acknowledged the market in Europe isn’t at is best, with demand significantly down, but companies are generally maintaining the ‘business as usual’ mentality.
“Of course, there will be moments that our market is a little bit quiet, but you cannot sit and relax,” said LAG Trailer CEO, Rob Ramaekers, who is pushing forward with factory upgrade plans and expansion in Poland. “You have to look to the future. You have to work together and look to the future.”
The second half of 2023 was a weak period for trailer demand in Western Europe, and it became clear in early 2024 that the first half of the current year would also have weak registrations figures.
After some strong years, faltering transport demand sparked a downturn in the European trailer market in 2023. Trailer ‘hoarding’ led to a delay in investments and long lead times disappeared, said Senior Transport and Logistics Economist, Rico Luman in report published earlier this year.
“We still expect to see a contraction in 2024, albeit smaller, as the economy is expected to remain sluggish and road transport only mildly recovers,” he wrote. “With economic growth catching up, expansion could happen in 2025.”
While the reasons for the downturn are varied and include post Covid adjustments and political unrest, especially in Ukraine, for BPW Personally Liable Managing Partner, Achim Kotz, a lot of it is a reflection on the state of the German economy.
“The economy in Germany is not great at the moment and in such an economy you don’t transport as much, and you don’t invest in transport or trade.”
The root cause, he admits, isn’t clear but for BPW, the answer is to continue to carry on producing with what they have.
“We have to concentrate on using our capacities as they are, and be cost effective and efficient,” he said. “Of course this isn’t going to last forever, transport has to exist.”
The Gross Domestic Product (GDP) in the European Union expanded 0.80 per cent in the second quarter of 2024 over the same quarter of the previous year. In Germany, economists forecast a growth in economic performance of only 0.1 per cent for 2024. Only in 2025 is stronger growth of 1.2 per cent expected.
US Trailer Market
US trailer orders declined year over year for the fourth consecutive month in August, according to ACT Research.
Preliminary net data showed orders fell 40 per cent year over year to 7,700 units. However, the total increased by about 500 units from July.
Seasonally adjusted results at this point in the annual order cycle boost the total for the month to 9,500 units. The only year-over-year increase this year was a 37 per cent rise in April.
“Despite the sequential order improvement, August data continue to bear witness to our expectations of weaker demand against the backdrop of elevated order velocity the past few years, continuing weak for-hire truck market fundamentals, and already-filled dealer inventories,” said the Director of Commercial Vehicle Market Research at ACT Research, Jennifer McNealy.
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