Europe sees massive fall in trailer production, demand

With many trailer manufacturers closing their businesses in April in order to comply with government recommendations on social distancing, a massive fall in trailer production and demand is anticipated in the second and third quarter, according to Clear International, a consulting group working with companies active in automotive and transport markets.

 

Added to this comes the fact that there was little or no business to be done, it stated. 

 

Now manufacturers are having to consider how they can resume production to at least meet the low level of demand that will exist in 2020 Q2, it added.

 

In January and February the trailer market was on course for a 14% fall in trailer demand in the first half of the year in line with the Clear forecast. 

 

By March however it was plain that the covid-19 impact was going to much more severe than anticipated. A fall of 23% is forecast for the first quarter and a fall of 41% is forecast for Q2.

 

In April, many European countries reached the peak of new infections resulting from the corona virus.

 

This report becomes significant as around 77% of all goods in Europe are moved by road and most of that proportion is transported in a trailer.

 

At the moment it is assumed that there will be something of a recovery in 2020 Q4, but there is a significant danger of this failing to materialise if there is a second wave of covid-19 infections combined with further restrictions on businesses and their employees, said the report by Clear.

 

According to the transport expert, inevitably comparisons are being made to 2009 when trailer demand fell by 51% in Western Europe and it took until 2015 for demand to return to trend level. 

 

GDP fell by 6% in 2009 and some forecasts are indicating the impact could be just as bad in 2020, with the worst of the impact occurring in the first half of the year, it stated.

 

However, there are scenarios suggesting that if the virus is not brought under control then the fall in GDP could be as much as 12% if extended lockdowns are brought back into force, it added.

 

Clear pointed out that under the more optimistic scenario it can expect a minimum fall in trailer demand of 26%, and under the more pessimistic outlook a fall of more than 50% is possible in 2020.

 

The European economy is totally reliant on road transport for the delivery of goods.  

Some sectors of the transport industry are protected by the need for basic provisions such as food, fuel and pharmaceuticals. However, other sectors are affected by the general disruption of business activity caused by the virus, it stated.

 

Nevertheless, the demand for road transport fell by 14% from 2009 to 2013.  As a result demand for new trailers was pegged at a low level during that period, it added.

 

To escape this fate from say 2020 to 2022 it seems likely a vaccine may be the only solution that will allow a V-shaped dip in economic activity, which would enable a rapid return to normal levels of road transport and new trailer demand, it added.-TradeArabia News Service

 

Source: http://www.tradearabia.com/news/IND_367566.html

 

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