Jim Downey

St. Paul, MN — The Power Systems Research Truck Production Index (PSR-TPI) increased from 109 to 147, or 35%, for the three-month period ended Dec. 31, 2020, from the Q3 2020. The year-over-year (Q4 2019 to Q4 2020) gain for the PSR-TPI was 121 to 147, or 21%.

The PSR-TPI measures truck production globally and across six regions: North America, China, Europe, South America, Japan & Korea and Emerging Markets.

This data comes from OE Link™, the proprietary database maintained by Power Systems Research.

Global Index. Overall, this year is expected to be an improvement in commercial vehicle demand compared with 2020.  While the Coronavirus is expected to remain through much of this year, the negative impact on the global economy should not be as significant as it was in 2020.

All Regions. With the exception of China, PSR expects all of the other regions to experience improvement in commercial vehicle demand this year and likely into 2022 as fleets look to replace their aging vehicles. 

North America. Commercial truck demand rebounded in Q4 2020 particularly in the class 8 segment.  Order rates for class 8 came in stronger than expected which bodes well for production through at least the first half of 2021.  Freight rates remain relatively high and this trend is expected to continue throughout the year.  Congress passed another round of economic stimulus which will also bode well for commercial vehicle adoption.  While the Coronavirus continues to negatively impact the economy overall, PSR does not believe the effects will cause a significant slowdown in demand this year.

Europe. Through eleven months of 2020, European commercial truck sales declined by 27% compared with 2019.  Heavy truck sales declined by approximately 29% during the eleven-month period.  However, Q4 2020 showed significant improvement in sales and orders which will bode well for production this year.  The medium and heavy bus segment also showed significant improvement in the fourth quarter.  While the Coronavirus will continue to be a drag on regional economies, PSR expects the worst to be behind us and gradually improving demand is expected moving forward.

South Asia. The Indian economy has recovered at a much faster rate than expected during the Q4 2020. In the MHCV segment, class 6 & 7 performed better due to the rapidly expanding e-commerce sector and improving automotive sales. The utilization rate of the class 8 segment is improving but has yet to cross the threshold to trigger significant new demand. The bus segment continues to struggle primarily because of the work-from-home push by the government, travel restrictions and people generally avoiding public transportation.  The industry is likely to witness a headwind due to overcapacity in the market, continued driver shortages and the increased traction of rail transport.  The recently launched PLI scheme will provide an additional push to the market from 2022.

South America. Medium and heavy commercial vehicle production declined by approximately 27% in 2020 with heavy truck and buses seeing the sharpest decline.  Much like North America and Europe, demand started to improve during the fourth quarter of 2020 and PSR expects production to increase to the levels seen in 2019 prior to the Coronavirus outbreak.  Production will be driven by both the domestic and export markets this year.

Japan/Korea. While PSR expects medium and heavy commercial vehicle production to improve by double digits this year, it will likely be 2022 before demand improves to replacement and expansionary levels.  Export demand is expected to improve quicker than domestic demand in both Japan and South Korea.

Greater China. Medium and heavy commercial truck production achieved record levels in 2020 primarily driven by the government requirement to replace all China III and lower emission vehicles with vehicles meeting China V or China VI emission requirements. This, along with stricter punishment of overloaded vehicles in big cities and also in some small cities and rural areas, drove the sharp increase in demand. 

This will result in a significant drop in truck demand this year.  The heavy truck segment will see the most significant decline.  The China VI emission regulation is scheduled to be implemented on July 1, which may cause some level of pre-buy in the first half of the year followed by a sharp drop off in demand in the latter half of 2021.

The next update of the Power Systems Research TPI will be in April 2021 and will reflect changes in the TPI during Q1 2021.  PSR

Jim Downey is vice president – global data products at Power Systems Research

Chris Fisher is the senior commercial vehicle analyst at Power Systems Research

St. Paul, MN — The Power Systems Research Truck Production Index (PSR-TPI) increased from 36 to 109, or 203%, for the three-month period ended Oct. 31, 2020, from the Q2 2020. The year-over-year (Q3 2019 to Q3 2020) loss for the PSR-TPI was, 117 to 109, or 6.8%.

The PSR-TPI measures truck production globally and across six regions: North America, China, Europe, South America, Japan & Korea and Emerging Markets.

This data comes from OE Link™, the proprietary database maintained by Power Systems Research.

All Regions: Most of the regions experienced a sharp decline in production during the late first quarter into the second quarter but for the most part, demand and production has stabilized.  However, demand in India continues to struggle for several reasons including the virus.  China is on track to have a record year for medium and heavy truck production.

Global Index: In general, global demand for medium and heavy commercial vehicles will decline this year is expected to gradually improve during the next few years as the pandemic wanes.

North America: While commercial vehicle demand plummeted earlier this year, primarily driven by the impact of the Coronavirus, demand has since rebounded, but not to the levels of last year.  While there is a threat of the virus making a resurgence in Q4 2020, PSR believes this will not cause another sharp drop in demand but rather a slowdown in sales.  Much will also depend on the government’s implementation of an economic stimulus package which is still up in the air at the time of this writing.

Europe: During the first half of this year, medium and heavy truck registrations in the EU declined by 43% compared to the first half of 2019; bus registrations declined by 35%.  While we believe demand has stabilized, sales are expected to be down significantly over last year.  Export demand also has declined sharply this year, primarily due to the impact of the coronavirus on the global markets.

South Asia: Coupled with price hikes in BSVI era in India, increasing fuel prices (13% increase from January to August), economic recession, lower freight demand, driver and labor shortages (loading/un-loading of goods) – the headwinds in MHCV industry continue and the year 2020 will go down as the worst year for the MHCV industry.   Driven by social-distancing and work-from-home policies, muted or no demand for buses from the education sector and office staff, the bus segment is also one of the worst hit with our estimates of only 10-15% in-service bus fleets being operational.  The improving rail freight infrastructure, the proposed vehicle extension policy, shifting focus on the used-truck market and under-utilization of in-service vehicle population are likely to further dampen the MHCV outlook in the mid-term.

South America: Through the first eight months of the year, medium and heavy truck production in Brazil declined by 36.5% while bus production declined by 55.6% compared to 2019.  While there has been some improvement during the past few months, domestic and export demand will continue to be soft throughout the remainder of this year.  Production was down sharply in April as most of the OEM’s and suppliers shut down production facilities as a result of the virus outbreak.

Japan/Korea: Much like the rest of the world, medium and heavy vehicle demand declined sharply in late Q1 and into Q2 as a direct result of the Coronavirus pandemic.  While demand has since stabilized in both the domestic and export markets, it will still be a few years before vehicle replacement levels improve to more historic levels.

Greater China: After declining sharply in February and into March, medium and heavy truck production has been extremely strong this year.  Much of this has been driven by the government mandate to eliminate the current Euro III and earlier emission complaint trucks and replace these with new Euro V vehicles. 

The plan is to have this completed by the end of 2020.  This along with stricter punishment of overload vehicles not only in big cities, but also to some small cities and rural areas.  As a result of this, PSR expected demand to decline during the next few years.  

The next update of the Power Systems Research TPI will be in January 2021 and will reflect changes in the TPI during Q4 2020.  PSR

Jim Downey is vice president – global data products at Power Systems Research

Chris Fisher is the senior commercial vehicle analyst at Power Systems Research

St. Paul, MN (July 22, 2020)— Global truck production was battered by the COVID-19 in Q2 2020, and this decline is reflected in the Q2 2020 Power Systems Research Truck Production Index (PSR-TPI). The TPI plummeted from 80 to 34, or 57.5%, for the three-month period ended June 30, 2020, compared to Q1 2020. The year-over-year (Q2 2019 to Q2 2020) loss for the PSR-TPI was, 131 to 34, or 74%.

The PSR-TPI measures truck production globally and across six regions: North America, China, Europe, South America, Japan & Korea and Emerging Markets.

This data comes from CV Link™, the proprietary database maintained by Power Systems Research.

All Regions: Apart from China, all regions experienced a significant decline in medium and heavy truck production during the first half of the year.  Most of the decline was caused by the Coronavirus.

Global Index: Globally, production will decline this year as a result of the pandemic.  However, the worst appears to be over and a gradual improvement in commercial vehicle demand is expected.

North America: Commercial truck demand has declined significantly during the first half of the year, primarily due to the impact of the Coronavirus and concerns about future truck demand.  This along with overcapacity in the market and heavy vehicle inventories at the end of last year will continue to place negative pressure on production moving forward.  However, the worst appears to be behind us, but production is expected to be somewhat variable during the remainder of the year.

Europe: For the first five months of the year, European medium and heavy truck demand was 40% lower than the same period last year.  Numerous truck plants were idled during March through May which led to a sharp decline in production.  However, the market appears to have stabilized and demand is expected to improve later this year. Prior to the outbreak of the Coronavirus, European truck demand was expected to be down around 15% due to a slowing economy.

South Asia: With extended lockdowns driven by COVID- 19 in most parts of India, the production of all non-essentials was at miniscule production levels in April and May, until the economy recently was opened.  As the economy recovers from lockdown and operations resume, our forecast assumes that there won’t be another shutdown.  The other South Asian countries also are experiencing lower production levels primarily due to the impact of the Coronavirus outbreak.

South America: Commercial vehicle production was relatively strong during Q1 2020 before declining sharply in April and May as many truck plants were idled.  While the negative effects of the virus are expected to continue, production should gradually improve through the last half of the year.

Japan/Korea: Global demand for medium and heavy commercial vehicles declined sharply during Q2 2020 which resulted in plants being idled in both Japan and Korea.  Overall, production appears to be back on-line.  However, global demand is expected to remain soft for the remainder of the year.  It should be noted that a significant amount of commercial truck production in this region is exported throughout the global market.

Greater China: Except for February, medium and heavy truck production remained strong during the first half of the year.  Truck production in April and May was particularly strong.  However, bus production declined sharply but is expected to improve throughout the remainder of the year. 

The next update of the Power Systems Research TPI will be in October 2020 and will reflect changes in the TPI during Q3 2020.  PSR

Jim Downey is vice president – global data products at Power Systems Research

Chris Fisher is the senior commercial vehicle analyst at Power Systems Research

ST. PAUL, MN — The Power Systems Research Truck Production Index (PSR-TPI) decreased from 122 to 84, or 31.1%, for the three-month period ended March 31, 2020, from Q4 2019. The year-over-year (Q1 2019 to Q1 2020) loss for the PSR-TPI was, 116 to 84, or 27.6%.

The PSR-TPI measures truck production globally and across six regions: North America, China, Europe, South America, Japan & Korea and Emerging Markets.

This data comes from CV Link™, the proprietary database maintained by Power Systems Research.

All Regions: Prior to the spread of the Coronavirus, most regions were experiencing a slowdown in commercial truck demand. Depending on the duration of the virus, several countries are expected to slip into recession or a significant economic slowdown as a result.

Global Index: The possibility of a global recession now exists but it is uncertain how severe this may be. Some regions will fair better than others.

North America: The introduction of the Coronavirus along with an overcapacity of heavy trucks will lead to significantly lower demand in 2020. Prior to the Coronavirus outbreak, concerns about the Chinese tariffs and an overall slowdown in global economic growth were causing some headwinds for truck demand. PSR

Jim Downey is Vice President – Global Data Products at Power Systems Research

Chris Fisher is the Senior Commercial Vehicle Analyst at Power Systems Research

St. Paul, MN (Oct. 16, 2019)— The Power Systems Research Truck Production Index (PSR-TPI) dropped from 128 to 1116, or 9.4%, for the three-month period ended Sept. 30, 2019, from Q2 2019. The year-over-year (Q3 2018 to Q3 2019) loss for the PSR-TPI was, 120 to 116, or 3.3%.

Total global truck production for Q3 2019 was 1,431,959, down from 1,481,020 in Q3 2018.

The PSR-TPI measures truck production globally and across six regions: North America, China, Europe, South America, Japan & Korea and Emerging Markets.

This data comes from CV Link™, the proprietary database maintained by Power Systems Research.

Global Index: Much like the global economy, medium and heavy truck demand has slowed this year and is expected to remain soft throughout 2020.  Currently, a global recession is not forecasted but a cooling off is expected over the longer term.

All Regions: Commercial truck demand in North America and portions of Eastern Europe have been relatively strong for much of the year while most other regions have experienced a slowdown.  PSR expects a continued slowdown in medium and heavy truck demand for most regions in 2020.

North America: While demand for medium and heavy commercial trucks have been very strong this year, a slowdown in demand has started and PSR expects significantly lower class 8 truck production in 2020 as a result of a slowing economy, lower freight rates, uncertainty surrounding the tariff situation and an overcapacity of heavy trucks in the market.

Europe: Demand for medium and heavy commercial trucks continues to slow in Western Europe as the global economy has weakened and trade tariffs are having a negative impact on the European economy.  Germany is currently teetering on recession as demand for vehicles has declined in recent months.

South Asia: Medium and heavy truck demand has been slowing throughout the year as the global economy is experiencing some weakness which is expected to continue into 2020.  After very strong demand in India over the past few years, the market is at overcapacity.  This, along with the introduction of the BS-VI emission regulations on April 1, 2020,^, will continue to put pressure demand.  Commercial vehicles that do not meet BS-VI emissions standards cannot be sold in India after April 1^, 2020.

South America: Medium and heavy truck production is expected to increase by 5.2% this year, driven by Brazilian production.  Improved demand in both the domestic and export markets continue to drive sales.  After several years of low demand as a result of relatively young fleets and a very poor economy, demand started to improve during the past few years as the truck companies needed to replace their older trucks.

Japan/Korea: Medium and heavy truck production is expected to decline by 2.7% this year as both the domestic and export economies slow.  Some of the decline in exports may be attributed to uncertainty surrounding tariffs.  Most of the production in Japan is for export which provides for very diverse vehicle markets.

Greater China: Medium and heavy truck demand is expected to decline slightly this year primarily due to a slowing economy, relatively high truck capacity and higher truck prices partly due to the cost of emission technology.  Lower freight rates are also pressuring truck demand.  It is unknown how much of an impact the trade tariffs play into this.  The combination of a slowing economy and relatively high truck capacity, demand is expected to be soft during the next few years.  

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For information on our products and services, call +1 651-905-8400 or email us at info@powersys.com. PSR

ST. PAUL, MN — The Power Systems Research Truck Production Index (PSR-TPI) increased from 106 to 120, or 13.2%, for the three-month period ended June 30, 2019, from Q1 2019. The year-over-year (Q2 2018 to Q2 2019) loss for the PSR-TPI was, 122 to 120, or 1.6%.

Commercial truck demand in North America and portions of Eastern Europe is expected to be relatively strong for much of the year, at the same time most other regions are experiencing a slowdown. PSR expects a continued slowdown in medium and heavy truck demand for most regions in 2020.

The PSR-TPI measures truck production globally and across six regions: North America, China, Europe, South America, Japan & Korea and Emerging Markets. This data comes from CV Link™, the proprietary database maintained by Power Systems Research.

Global Index: Much like the global economy, medium and heavy truck demand is expected to slow this year and into 2020. Currently, a global recession is not forecasted but rather a cooling off is expected. According to IHS Markit, global GDP was 3.2% in 2018 and is forecasted to edge down to 2.9% in 2019 and 2.8% in 2020. These indicators align with what PSR is seeing in the global medium and heavy truck market.

North America: While demand for medium and heavy commercial trucks has been strong this year, order rates have started to decline more than expected and some 2019 build slots have opened in the class 8 segment. Class 8 demand has started to slow as freight rates
continue to deteriorate. It is believed that an overall slowing of the market along with concerns about a trade war is affecting demand.

Europe: Overall, sales and production for medium and heavy commercial trucks in Europe is expected to be flat this year compared with 2018. Production in Western Europe is expected to decline by 4% while production in Eastern Europe is expected to increase by 15.5% as the trucking companies continue to replace older vehicles.

South Asia: After very strong demand in the medium and heavy truck segment during the past few years, it appears the regional economies are cooling somewhat, and production is expected to decline by 14% this year over 2018. The decline is expected to be led by India with a drop of 16% this year. Truck overcapacity of 15% – 18%, along with an overall slowdown in the automotive segment, will contribute to this. The implementation of the BSVI emission regulations in April 2020, also will have a negative impact as the OEMs begin equipping trucks with the higher cost emission technology throughout the year.

South America: Medium and heavy truck production is expected to increase by 7% this year, driven by Brazilian production. Improved demand in both the domestic and export markets continues to drive sales. After several years of low demand as a result of relatively young fleets and a very poor economy, demand started to improve during the past few years as the truck companies needed to replace their older trucks.

Japan/Korea: Medium and heavy truck production is expected to decline by 2% this year as both the domestic and export economies slow. Some of the decline in exports may be attributed to uncertainty surrounding tariffs. Most of the production in Japan is for export, which provides for very diverse vehicle markets. Greater China: Medium and heavy truck demand is expected to decline this year primarily due to a slowing economy, relatively high truck capacity and higher truck prices partly due to the cost of emission technology and lower freight rates. It is unknown how much of an impact the trade tariffs play into this. Given the combination of a slowing economy and relatively high truck capacity, demand is expected to be soft during the next few years.

The next update of the Power Systems Research TPI will be in October 2019 and will reflect changes in the TPI during Q3 2019. PSR

Chris Fisher is the senior commercial vehicle analyst at Power Systems Research

Jim Downey is vice president -global data products at Power Systems Research

The Power Systems Research Truck Production Index (PSR-TPI) decreased from 115 to 109, or 5.2%, for the three-month period ended March 31, 2019, from the fourth quarter of 2018. The year-over-year (Q1 2018 to Q1 2019) change for the PSR-TPI was basically flat,  moving from 110 to 109, or .91%.

The PSR-TPI measures truck production globally and across six regions: North America, China, Europe, South America, Japan & Korea and Emerging Markets.

This data comes from CV Link™, the proprietary database of commercial vehicles maintained by Power Systems Research.

Here is the analysis of changes by region.

Summary: Commercial truck demand in North America and portions of Eastern Europe are expected to be relatively strong for much of the year while most other regions are experiencing a slowdown.  However, no regional recessions are expected.

Global Index: Much like the global economy, medium and heavy truck demand is expected to slow this year and into 2020.  Currently, a global recession is not forecasted. However, a cooling off is expected.  According to IHS Markit, global GDP was 3.2% in 2018 and is expected to edge down to 3.1% in 2019 and 2.9% in 2020.

North America: Medium and heavy commercial truck demand continued to be strong during the first quarter driven by the current state of the economy.  Class 8 truck demand is expected to remain strong through most of the year, but a cyclical slowdown is expected toward the end of 2019 into 2020.  The medium duty segment continues to enjoy strong consumer and vocational demand.

Europe: Despite the slowing European economy primarily due to weak external demand and political uncertainty, MHCV sales are expected to remain relatively strong this year.  Demand in Eastern Europe is expected to be stronger than Western Europe as the trucking companies continue their replacement demand.

South Asia: After exceptionally high sales during the past two years, MHCV demand is expected to decline in 2019 primarily due to weakness in India.  Truck overcapacity of 15% – 18%, along with an overall slowdown in the automotive segment will contribute to this situation.  With the industry focusing on the BS-VI emission regulations scheduled for implementation in April 2020, we can expect some choppy demand toward the end of the year.

South America: Primarily driven by Brazil, MHCV demand continues to improve after several years of poor sales as a result of a weak economy.  Domestic and export sales started to improve in 2017 and continued through last year.  While truck exports are the main reason for this increase, domestic demand has also significantly improved during the past year.

Japan/Korea: Demand for MHCV’s is expected to decline slightly this year as both the domestic and export economies slow.  Most of the production in Japan is for export which provides for very diverse vehicle markets.

Greater China: After two years of very high demand in the heavy commercial truck segment, demand is expected to decline this year primarily due to a slowing economy and relatively high truck capacity and higher truck prices partly due to the cost of emission technology and lower freight rates.  The combination of a slowing economy and relatively high truck capacity, demand is expected to be soft during the next few years.

The next update of the Power Systems Research TPI will be in July 2019 and will reflect changes in the TPI during Q2 2019.  PSR