ECONOMIC WATCH: Class 8 production to drop 66%, ACT predicts

by Today's Trucking

COLUMBUS, Ind. – Class 8 production this year will plummet about 66%, according to a prediction from industry analyst ACT Research, published in its North American Commercial Vehicle On-Highway Engine Outlook.

“Coming off the peak of 2019, we expect North American Class 8 heavy commercial vehicle production to drop an eye-watering 66% this year,” said Kenny Vieth, president and senior analyst at ACT Research.

“Retail sales will show a smaller reduction, but only because high inventory levels must be reduced to levels in line with lower demand. Freight demand has fallen, global supply chains have been severely disrupted, and even before Covid-19, the world was shifting toward increased e-commerce. The pandemic’s impact has only hastened that trend; in March, e-commerce recorded a 50% increase in home goods sales, and a more than 200% jump in online food deliveries. All this has a direct correlation to the number and types of commercial vehicles needed, buffered currently by the industry’s ability to adjust production amid lock downs and shutdowns.”

The report was produced with Rhein Associates. Andrew Wrobel, global market intelligence, commercial vehicle and off-highway forecasts, noted: “It is anticipated that trucks will increase use of smaller displacement engines, while the forecast predicts a gradual reduction in favor of the 12-14L category for use in tractors, as opposed to the over 14L category. We expect the 12-14L engine segment to dominate in tractor-use demand by 2024.”

Regarding Classes 5-7, Wrobel said, “In this market, the current metric of interest is gasoline penetration, which continues to gain share, and is forecast to hit nearly 24% of the market by 2024.”

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