Outlook for heavy trailer sales in Western Europe improves

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*Economic forecasts are marginally stronger for the region

On a positive note transport analysts CLEAR International has issued its June 2023 forecast for the West European Heavy Trailer Market.

Since the report in June 2022 the war in Ukraine and the cost of energy plus general price inflation have replaced Covid-19 as the principal threats to growth in trailer demand. Inflation rose to 10% but is now moderating. Interest rates however are still increasing, was the words of caution expressed.

“Economic forecasts for countries in Western Europe are now slightly less pessimistic for 2023. As a result the forecasts for trailer demand in 2023 and subsequent years have improved but only slightly. West European trailer demand remains somewhat insulated from the impact of the war in Ukraine compared to countries that are geographically close to the conflict,” explained Gary Beecroft, M.D., CLEAR International.

“Increased costs caused by high inflation and interest rates, combined with some continued problems with sourcing vehicle parts are making manufacturing difficult. A European war plus a difficult economic situation cannot help but dent business confidence and reduce companies’ willingness to invest in new transport equipment.”

CLEAR envisages 10.4% fall in trailer demand in 2023. Subsequent growth in the forecast period will bring the sales level close to that of 2022 by 2025. The 2024-25 period is expected to be more positive in terms of both the West European economy and trailer registration growth. In fact, CLEAR believes that most published economic forecasts for 2024 are excessively pessimistic, with a stronger bounce back from 2023 very likely.

The outlook for Germany and the Netherlands in 2023 has improved slightly based on the demand to April, whereas Denmark and Belgium look weaker.

Following the worst effects of the covid pandemic, the demand for road transport (measured in tonne-km) grew from 2020q4 until 2022q1, but has fallen in every quarter since 2022q2.

Gary concluded: “There is some uncertainty as to how the trailer market will develop in 2023. Trailer demand in some countries, and heavy truck demand in most countries was strong in 2023q1, but this strength is not likely to be sustained in throughout the year.”

On the global picture, Gary added: “The Russian intervention in Ukraine will result in its trailer market falling back to the levels last seen after the occupation of Crimea in 2014. The sanctions imposed on Russia (again) are having a real effect. In contrast Poland, Turkey and Lithuania will have strong markets in the post-covid forecast period.”.