2020-10-19
Power Systems Research produced a one-hour webinar with the Heavy Duty Manufacturers Association (HDMA) that provided the outlook for commercial vehicle production in North America and Europe during Q4 2020 and 2021.
Download the presentation by PSR representatives Chris Fisher, senior commercial vehicle analyst, and Emiliano Marzoli, senior business development manager-Europe. A member survey by HDMA’s Richard Anderson also is available for download here. PSR
2020-10-12
Power Systems Research will produce a one-hour webinar with the Heavy Duty Manufacturers Association (HDMA) providing the outlook for commercial vehicle production in North America and Europe during Q4 2020 and 2021.
Hope you can participate. During the session, we’ll present important information that updates the North American comments we made in our COVID-19 Impact webinar in June. The HDMA Pulse Series Webinars provide suppliers with the information needed to make decisions in today’s rapidly changing business environment.
The webinar will be held Wednesday, Oct. 14, 2020 1:00pm – 2:00pm EDT.
Space is limited, so please register as soon as possible using the REGISTER NOW button on the HDMA website at www.hdma.org. If you are not a PSR Client or HDMA Member, an individual registration is $100.
2020-09-22
Published in Automotive Business, August, 26, 2020
1. INTRODUCTION
The use of diesel in Commercial Vehicles and its alternatives has been studied and discussed globally over the past two decades. We have updated future trends annually based on the new platforms in our data and new models in development allowing us a 10-year horizon. In August 2019 we published an article on the subject for Automotive Business Brazil, which is now updating.
In the 2019 article we said that fossil diesel propulsion for commercial vehicles would be exposed to several alternatives and therefore the 20s decade would be a decade of significant changes, justifying yearly monitoring of the subject.
This whole range of studies was then impacted by COVID-19, a new event at the beginning of this decade that is another factor of change in this complex subject.
2020-08-23
With the problems caused by COVID-19, ANFAEA is lobbying to postpone the introduction of PROCONVE P8 – an emissions regulation that will make the Brazil emissions level similar to Euro VI.
ANFAVEA argues that the postponement is needed because of delays in testing and engineering development caused by COVID-19. The level of investment necessary also has increased.
Source: Automotive Business Read The Article
PSR Analysis: The Brazilian government is not likely to approve the postponement and the deadline date of 2022 probably will be kept. It is important to Brazil to be current in terms of emissions as Brazil is a hub of production for South America, and the ability to export will be jeopardized if the level of production technology declines. PSR
Fabio Ferraresi is Director Business Development South America for Power Systems Research
The prices of used construction equipment continue to fall, and bidding prices at major auctions are 10% lower than in the same period last year. This is due to a decrease in demand from Southeast Asia due to the COVID-19.
Demand in Japan is steady due to the torrential rains in Kyushu and other factors, but the price decline in overseas markets has lowered the overall market.
Demand in the Philippines and Thailand also declined. In Southeast Asia, demand for cranes and other infrastructure-related equipment has been high for the past few years, but there have been several construction delays and stoppages caused by COVID-19. The average unit price at the crane truck auction was about 6 million yen, a 20% drop from January to March before COVID-19.
FAR EAST: JAPAN REPORT
Kubota will invest up to US$ 93.9 Million (10 billion yen) by 2026 to build a factory for small construction equipment in the US. The company will manufacture crawler-driven models used for residential construction and other purposes locally to increase the production by 25%.
With COVID-19, there is a movement of people moving from the city center to the suburbs in the US. Kubota expects that the demand for small construction equipment will increase in the regions where it has sales channels and aims to become the largest manufacturer in the US by increasing production. First, they will invest 5.6 billion yen (56 Million USD) to build a new factory in Kansas.
The company will start mass production of its “Compact Track Loader (CTL)” in September 2022. By 2023, annual production will reach 3,000 units. Depending upon demand, the company could be producing 5,000 units annually by 2026. Japan is producing about 20,000 of the same model. With the addition of 5,000 units from the United States, the total production will increase by about 25%.
If you were hoping for COVID-19 to disappear from the news by the school year, it’s obviously not going to happen. With major companies like Google announcing they won’t be sending employees back to their offices until the summer of 2021 and COVID metrics climbing again in the South and West, we probably will be working on the impact of the pandemic well into next year.
It could almost be considered a truism to say that COVID-19 has been bad for business. The 33% annualized decline in GDP in Q2 2020 would apparently confirm that, and even the most positive about the economy must concede that a 9.5% single-quarter contraction is painful, to say the least. With businesses closed and housing starts in June lagging 4% behind last year, even with the brief reprieve when states began to reopen, the power generation segment has been hit hard by the pandemic.
Cummins, a giant in the industry, announced at the end of July that its revenues for Q2 2020 had fallen 38% from Q2 2019. That increased to 48% when looking at North America alone. Engine sales were down 47%, and power generation revenues declined by 37%. While Cummins was able to achieve positive net income because of a quick ramp-up in production in China after the worst of the virus had passed there, it was less than half of net income from Q2 2019.
2020-07-26
With extended lockdowns in most parts of India, the production of all non-essentials was at a halt or at minuscule levels in April and May until the economy was unlocked. This move reduced demand in the short-term, but owing to intrinsic domestic demand, we are optimistic about future business expectations
Better Outlook of Rural Economy
However, hope has arisen from India’s rural part as the agriculture sector appears to have been relatively less impacted by the lockdown. This part of the country never truly went into a harsh lockdown, and thus procurement, harvest, and consumer activities have remained unaffected. Farming continued during the lockdown, especially for rice and wheat cultivation. The return of migrant workers caused a surplus of agricultural labor. This resulted in the fact – more land was brought under cultivation than ever before. As a result, the country has witnessed a good season of rabi harvest.
Grab and GOJEK, the two strongest Southeast Asian ride-hiring services, will focus their resources on their ancestral businesses of car dispatch, delivery and payment. Due to the impact of the new coronavirus, both companies have decided to reduce their workforce for the first time since their founding about 10 years ago and are withdrawing from their non-core businesses.
The “Super-app” concept, which provides a full range of lifestyle-related services, was forced to be reviewed.
Grab and GOJEK announced in succession in June that they would be laying off 5% (360 employees) and 9% (430 employees), respectively.
Since February, the business environment has changed dramatically with the COVID-19. The use of the service has plummeted due to restrictions on behavior by governments.
2020-06-22
HDMA-PSR COVID Webinar Presentation
COVID-19 continues to batter production of off-highway equipment as we continue to move through 2020. The effects of the virus on Agricultural and Construction equipment production in North America were analyzed in a June 17 webinar presented by the Heavy Duty Manufacturers Association (HDMA) and Power Systems Research (PSR). The webinar updated information presented in PSR’s webinar in April.
The PSR webinar team was Jim Downey, PSR vice president-global data products , and Yosyf Sherementa, PhD, PSR director-product management and customer experience.
PSR projects AG to be down 9.4% and CN to be down 11.3% when comparing global production for this year (2020) to last year (2019).
China and India which have the largest volumes for ag machinery are the lower side for production percentage drops this year. China which is also the largest producer of construction equipment is not expecting a decline this year.
A slight recovery for Construction equipment is expected in 2021, but not until 2022 for Agricultural machinery. Ag sector recovery will ultimately depend on overall economic recovery from the COVID-19 pandemic.
The construction segment will not return to pre-virus production volumes for another few years, at best. We’re looking out to 2024 or possibly 2025 to get back to 1.48 million units.
We don’t see a V-shaped type scenario on the horizon in North America, but rather recovery will look like something between a “U” and an “L.” Somewhat of a swoosh shape or upward sloping L. Economic activity will slowly return to a sense of normalcy as the curve of new COVID-19 cases flattens.
Government support and intervention will be needed, and stimulus will provide an economic backstop. We expect modest growth in 2021. Pent-up demand and continued economic stimulus should also help with rebound.
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