CRU: Truck and Trailer Demand on Cruise Control

LONDON, May 30, 2018 /PRNewswire/ -- One of the surprise bright spots for aluminium demand in 2017 were the heavy-truck and trailer markets, and strong demand from these end-use markets has continued in 2018.

December 2017 orders for Class 8 trucks posted the highest level since 2014, and total 2017 order levels were 58% higher than 2016, according to industry statistics. For trailers, data show that orders in 2017 grew by 40% y/y over 2016. Due to strong orders in both heavy truck and trailers, large production backlogs existed at the end of 2017. This was a good sign for aluminium demand from the truck and trailer sectors for 2018, despite previous market expectations that this sector could remain weak in 2018.

Through the first four months of 2018, demand for Class 8 trucks and trailers remains at record levels. In Q1 2018, Class 8 truck orders were up nearly 100% from Q1 2017, posting the largest total of any quarter in history, according to industry statistics. Through April 2018, year-to-date orders for Class 8 trucks are 85% higher than the same period in 2017. Likewise, orders for trailers have also been robust, as YTD orders through Q1 2018 were 26% higher than in Q1 2017. Consistently strong order levels are expected to push OEMs and their suppliers to increase production levels in 2018, and market participants expect this momentum in the heavy truck market will carry into 2019 as well.

Factors behind the frenzy

These high order numbers are the result of several factors. Trucking conditions in the US are strong, and there is a lack of trucks to satisfy demand for freight. As a result, carriers continue to place large orders to secure manufacturing slots at the OEMs and add more trucks to their fleets as quickly as possible. Industry experts state that freight growth and demand for trucks and trailers are growing due to a strong US economy, growing online sales, low unemployment, and tax law changes that incentivised investment.

Trucks typically have a four to five-year life cycle. The prior peak in truck sales was in 2014-2015, so a large amount of these trucks will need to be replaced over the next two years, but that also means a lot of used trucks will be coming on to the market to compete with new trucks.

Read the full story: https://www.crugroup.com/knowledge-and-insights/insights/2018/truck-and-trailer-demand-on-cruise-control/ 

Read more about CRU: http://bit.ly/About_CRU 

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SOURCE CRU