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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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Chris Fisher is the senior commercial vehicle analyst at Power Systems Research
Jim Downey is vice president – global data products at Power Systems Research