Stronger trailer registrations in Q3 2020 results in slightly improved outlook for the West European market

Due to the outbreak of the Coronavirus; Covid‑19, which led to the partial shutdown of all West European economies, it is not surprising therefore that ten countries in Western Europe saw falls in trailer demand in 2019 and the remaining five posted only small gains, according to industry analysists CLEAR International.

In updating its projections for the European Truck Trailer Market since the last report in May, Gary Beecroft, CLEAR international stated that “most West European countries have had their forecasts for 2020 economic growth downgraded again. All forecasts now show negative GDP growth of between -6% and -11% in 2020 with every country in recession during this year.”

“In 2020, all countries will have investment growth levels even more negative than the falls in the GDP figures. Investment growth rates have been falling since 2017/18. In 2020 however, the average fall in new trailer registrations will be 22% with the UK falling by 29%,” he said.

On the assumption that the second wave of Covid-19 is kept under control (which remains to be seen), Gary envisages double digit growth of trailer demand in 2021. However, this will not be sufficient to recover the sales lost in 2020 – “it will be several years before we see a return to the levels of trailer demand witnessed in 2018.”

Production of trailers was at the third highest level on record in 2018 (though well short of the 2007 figure). Therefore, pre‑Covid-19, the industry was achieving both high levels of output and stability. The total fall in registrations from 2018 to 2020 will be 24% and the fall in production will be 28%. The trailer parc (fleet size) will suffer a small fall in 2020 then grow very slowly in the two years that follow.

At the time of writing the Corona virus outbreak is escalating in its effect on Western Europe, with the number of new infections and deaths increasing. New restrictions are being put in place on a regular basis. France, Germany, Austria, Ireland and the UK have gone back into lockdown. The danger is that with no vaccine likely to be widely available before mid-2021, the second and third waves of infection will partly shut down economies once more.

“The impact of the new restrictions and lockdowns on the 2020 forecast figures will be fairly negligible. However, the growth level in 2021 may be affected as business confidence takes a knock. The forecast for 2022 registrations will not change to any substantial degree. Any sales lost in 2021 will be made up in 2022. The imposition of some tariffs and duties on international trade in recent years has already had an impact on the level of import and export activity and business confidence. The covid-19 outbreak has only made matters much worse.”

“Reduced trade will lead to a reduction in the demand for road transport and hence reduced demand for new trailers. Both the value of international trade and the demand for road transport (measured in tonne-km) grew quite strongly in the 2016-18 period, but these activities stalled in some countries and regions in 2019, and will decline markedly in 2020,” concluded Gary.