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Commercial vehicle market recovery likely to be slow

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While the medium- and heavy-duty commercial vehicle markets are beginning a slow recovery from the lowest level of production since 1991, significant headwinds remain for the sector to return to normal replacement level demand, according to ACT Research Co (ACT).

In the latest release of the North American Commercial Vehicle Outlook, ACT predicts quarterly production rates for Class 8 vehicles will grow more than 20% on a year-over-year (y/y) basis in each quarter of 2010, but will not reach replacement level rates until early 2011. Medium-duty truck (Classes 5-7) production, which is largely tied to health of the construction industry, is expected to see y/y growth ramp up beginning in the second quarter of 2010.

“While the economy emerged from recession in the third quarter, we expect a slow recovery rather than a breakout,” said Kenny Vieth, partner and senior analyst with ACT Research. “With a slow recovery in demand, excess capacity in for-hire trucking sectors is not expected to be eliminated until the second half of 2010, putting continued pressure on transportation prices and profits. When profitability does return to trucking, there will be significant pent-up demand to replace older-than-normal fleets.”

© 2009 Penton Media. Displayed by permission. All rights reserved.

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