ACT Research announced Friday in its most recent North American Commercial Vehicle Outlook update that the large uptick in completed medium- and heavy-duty trucks through production lines in December were likely the result of isolated market opportunities, not foundational improvements to the supply chain.
“One of the questions we have been asked consistently since releasing December data in January’s State of the Industry Classes 5-8 Vehicles report is, ‘Are December’s production rates sustainable?’” says Kenny Vieth, ACT Research president and senior analyst. “In an examination of semiconductor industry reporting, there is nothing to suggest any material change to the expected incremental path of recovery built into the forecasts: There were no reports of chip supply miracles at the end of 2021.”
Vieth goes on to say temporary shutdowns in the auto industry and conversations with heavy-duty OEMs and suppliers all “reinforce the sentiment that the +500 unit-per-day Class 8 production surge and the approximately 240 unit-per-day jump from the prevailing medium-duty production rate in December were the harvesting of low-hanging [and nearly built] fruit, which, in at least some cases, were still missing parts upon ‘completion’.”
This month's Outlook report also details the circumstances that would enable a similarly strong month.
[RELATED: Fulfillment rates rising but 'structural issues' continue to hinder supply chain]
“There remains little solid intel as to the speed and timing of semiconductor capacity improvements in 2022. It is expected that the path will be an upward, if lumpy and back-end loaded, journey that coalesces into what should be a massive market in 2023, whipped up by pent-up demand early and prebuying late,” he says. “Coming as no surprise and despite demand being in place, the strength of the market in 2023 will ultimately be dictated by the unwinding of tangled supply chains in 2022.”
