Outlook for heavy trailer sales in Western Europe looks weaker in the first half of 2024

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There should be some improvement in 2024H2 as the investment outlook turns more positive

Trailer Industry barometer CLEAR International has just issued its March 2024 forecast for the West European Heavy Trailer Market.

Even with interest rates starting to fall the outlook during 2023 was difficult. CLEAR correctly forecast the trailer market would fall by 10%, but in the heavy truck market demand was up 21% in the first nine months of the year. This was caused by the EU Smart Tachograph 2.0 regulation which came into effect in August 2023. This also led to a large drop in truck demand from September, and weak demand will continue into the first quarter of 2024. So 2023 was one of those years where truck and trailer demand headed in opposite directions.

Economic forecasts for countries in Western Europe are pessimistic for 2024. There is likely to be a general lack of GDP and investment growth in the first half of the year, but there is reasonable hope for an upturn in the second half.

As a result, the forecasts for trailer demand in 2024 and subsequent years have been downgraded, but only slightly. Increased costs caused by high inflation and interest rates, combined with some continued problems with sourcing vehicle parts are making profitable manufacturing difficult. A European and a Middle Eastern war plus a difficult economic situation cannot help but dent business confidence and reduce companies’ willingness to invest in new transport equipment.

Following a 9.9% fall in trailer demand in 2023 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.  CLEAR believes that most published economic forecasts for 2024 are excessively pessimistic, with a stronger bounce back from 2023 likely.

The economic outlook in 2024 for Germany, Spain and the Netherlands are noticeably weaker than other counties at the moment.

Production of trailers was at the third highest level on record in 2018 (though well short of the 2007 figure). The total fall in registrations from 2018 to 2020 was 23% and the fall in production was 32%, partly due to a large fall in German trailer exports. Growth in output in 2024 and 2025 will bring the production level close to that seen in 2019, before covid-19.

The trailer parc (fleet size) grew by only 0.7% in 2023. It will grow by 1.2% on average in the forecast period which represents steady if unspectacular growth.

Following the worst effects of the covid pandemic, the demand for road transport (measured in tonne-km) grew from 2020q4 until 2022q1, but fell in every quarter from 2022q2 to 2023q2.

The West European trade in goods during 2021 gave another surprise. Trade was down only 3% in 2020q4 (measured in €uros). However, trade set a new record in 2022q3, when there was a surprisingly large jump, leading to an increase of 25% for 2022 as a whole – possibly related to the cost of gas imports and other items affected by high inflation – but then fell from 2023q2.

This report outlines when, where and how quickly the trailer market will develop through to 2028.

Gary Beecroft, managing director of CLEAR International commented, “Trailer market sales for 2024 will improve in the second half of the year. There will be some sales growth in both 2024 and 2025.”