Truck manufacturing entering rise and fall period; Truckmakers gear down
NEW YORK — North American Class 8 sales are expected to top a record 300,000 units this year, but could plunge by as much as 30 to 50 percent in ’07, according to a study by Roland Berger Strategy Consultants.
Higher fuel costs, tough new EPA rules and trucking labor shortages are the main reasons says the firm. Significant highs and lows in commercial truck demand are projected to continue into 2015, However.
Main issues for manufacturers going into the ’07 slump include adjusting to demand fluctuations without significantly increasing fixed costs; producingmore durable trucks (especially in low-durability areas like A/C & seats) for extended fleet tradecycles; getting dealer shops ready to pick up theslack as number of independent shops declines; and improving financial services and leasing operations, Roland states.
Meanwhile, analysts at BearStearns estimate that class 8 truck builders may have about 40,000 production slots left for this yeardue to EPA ’07 pre-buying. There may be some spill-over into Jan. ’07 due to timing of engine inventories, but that could add another 40,000-50,000 units at best, says the firm.
Freightliner, for one, is cautiously preparing its plants for a 40 to 50 percent reduction in ’07 heavy truck production, but “barring disaster, a complete recovery to normal market conditions in 2008,” COO RogerNielson told the Heavy Duty Manufacturer Association’s annual Breakfast & Briefing recently.
Nielson says the truckmaker is focusing design and engineering efforts on making ’07 “little more than a speed bump” on the way to ’08. Half the company’s ’06 engineering resources are dedicated to upcoming EPA regs, he said, adding there’s no cost pressure relief in sight for manufacturers and suppliers.
Freightliner’s goal is a 3 percent annual cost reduction,starting this year. “Cost reductions are good, but not at the sacrifice of quality,” he says. “Suppliers need to focus on earning our business locally, but keep your eyes on global solutions.”
— Via Truckinginfo.com
Have your say
This is a moderated forum. Comments will no longer be published unless they are accompanied by a first and last name and a verifiable email address. (Today's Trucking will not publish or share the email address.) Profane language and content deemed to be libelous, racist, or threatening in nature will not be published under any circumstances.