Truck and tractor production volumes are forecast to fall steeply this year, along with the demand for engines, according to the latest release of the “N.A. Commercial Vehicle On-Highway Engine Outlook,” published by ACT Research and Rhein Associates.
“Coming off the peak of 2019, we expect North American Class 8 heavy commercial vehicle production to drop an eye-watering 66 percent this year,” says Kenny Vieth, ACT president and senior analyst. “Retail sales will show a smaller reduction, but only because high inventory levels must be reduced to levels in line with lower demand.”
Falling freight demand, disruptions in global supply chains and a shift toward increased e-commerce — the increasing trend hastened by the coronavirus crisis — has affected truck demand, Vieth says.
“All this has a direct correlation to the number and types of commercial vehicles needed, buffered currently by the industry’s ability to adjust production amid lock downs and shutdowns,” he says.
Andrew Wrobel, of Rhein Associates’ Global Market Intelligence Commercial Vehicle and Off-Highway Forecasts, anticipates trucks will increase use of smaller displacement engines, while the forecast predicts a gradual reduction in favor of the 12-14L category for use in tractors, as opposed to the over 14L category. “We expect the 12-14L engine segment to dominate in tractor-use demand by 2024,” he says.
Regarding Classes 5-7, Wrobel says, “In this market, the current metric of interest is gasoline penetration, which continues to gain share, and is forecast to hit nearly 24 percent of the market by 2024.”
With respect to alternative fuels, Wrobel says, “Last-mile delivery companies have taken the lead in requiring alternative fuel vehicles due to their proximity to consumers, favorable economics and the enhancement of brand image. That said, oil prices have plummeted and fleets welcome the lower diesel costs, but we still see committed CNG users striving to meet corporate green initiatives with that fuel.”
About non-fossil fuel alternatives, he says, “Transit buses have seen the greatest application of electric medium- and heavy-duty vehicles to date, but major truck OEMs and new entrant programs are underway. Electric medium and heavy trucks are coming, albeit slowly.”