Trailer demand holding up: Bear Stearns

NEW YORK — North American truck sales might still be stagnant, but overall trailer demand has remained more or less robust, according to transportation market experts Bear Stearns.

A tier-two supplier to large trailer OEMs tells the agency that orders have been firm, as most of the manufacturers expect a pick-up in demand in the second half of the year.

Most of the downside of the industry is expected to be on the van side, while trailer demand in the agricultural sector — driven by demand for ethanol and other biofuels — is giving the trailer industry a boost.

However, the contact admitted that if demand on the over-the-road side is slower to materialize than expected, than in the near to intermediate-term, OEMs will be forced to drastically reduce production rates. Furthermore, strength in the agri, bulk segment cannot offset continued weakness in total trailer demand.

That said, the source said he was somewhat encouraged by a recent conversation a customer, who indicated “activity” had increased and last month’s order book was shaping up better than in prior months.

On the heavy-duty truck side, a supplier confirmed demand continues to be weak, but most customers still believe there’ll be an acceleration in heavy truck orders in the fourth quarter.

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