Reports

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

ST. PAUL, MN — The Power Systems Research Truck Production Index (PSR-TPI) increased from 115 to 118, or 2.6%, for the three-month period ended Dec. 31, 2018, from Q3 2018. The year-over-year (Q4 2017 to Q4 2018) gain for the PSR-TPI was 3.5%, climbing 4 points from 114 to 118.

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..

Except for North America, most of the other key regions are beginning to see an economic slowdown. Regarding the commercial truck market, a slowing global economy along with generally strong truck sales during the past few years is placing downward pressure on commercial vehicle adoption rates.   

Detailed comments are contained for each region with a corresponding regional graph in the attached downloadable PDF. 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) dropped from 124 to 112, or 9.7%, for the three-month period ended Sept. 30, 2018, from Q2 2018. The year-over-year (Q3 2017 to  Q3 2018) gain for the PSR-TPI was, 110 to 112, or 1.8%.

Commercial vehicle demand in 2018, has been particularly strong in North America, Brazil, Russia and India while demand is expected to decline sharply in China after very strong sales in 2017.  Demand in Japan/Korea is also in decline. Outside of China and Japan/Korea, medium and heavy commercial vehicle demand in the other regions is trending higher this year.

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.

Commercial vehicle demand globally in 2018, has been particularly strong in North America, Brazil, Russia and India while demand is expected to decline sharply in China after very strong sales in 2017.  Demand in Japan/Korea is also in decline. Outside of China and Japan/Korea, medium and heavy commercial vehicle demand in the other regions is trending higher this year. 
 
In North America, production levels for class 8 trucks continue to be strong, driven by record order levels that are expected to continue well into 2019.  Order boards basically are filled through H1 2019.  The strong economy is driving the need to replace or expand the fleets.  While not as strong as the heavy truck segment, the medium truck segment is having another good year, driven largely by strong consumer and vocational demand.

Medium and heavy truck production is expected to increase by 4.8% in Greater Europe this year over 2017.  Production in Western Europe should increase by 1.8%, while production in Eastern Europe could increase by 15.7% as the fleets continue to replace their aging trucks. 

After weak demand in Eastern Europe over the past few years a recovery in demand is in full swing.  While demand in Western Europe has slowed somewhat this year, it continues to be historically strong.

Strong demand in South Asia, led by demand in India, should boost production for medium and heavy trucks in South Asia this year by 10% over 2017.  Production in India is expected to increase by 11.1% this year after a soft 2017, primarily due to the implementation of the BS-IV emission regulations which increased the cost of the trucks.  Additional infrastructure spending is expected to boost demand in India during the next few years.

After several years with very low medium and heavy truck demand, domestic and export sales in South America started to improve last year and South American production is expected to increase by 12.9% in 2018, led by Brazil.  While truck exports are a main reason for this increase, domestic demand also has  improved significantly during the past year. Demand in Argentina is expected to soften as the country struggles with its economy.

Medium and heavy truck demand in Japan/Korea is expected to continue its decline by falling 9.7% this year as softness in domestic demand continues to impede the manufacturers.  Japanese production should decline by 9.7% while production in South Korea should fall by 7.1%, compared with last year.  Production continues to be transferred from Japan and Korea closer to their traditional export markets.
 
Because of China’s GB1589 regulations to control overloading of trucks last year, commercial truck demand in that country was very strong in 2017 and into the first eight months of 2018.  However, truck capacity is now relatively high and with higher truck prices partly due to the cost of emission technology and lower freight rates, demand is expected to decline in Q4 2018 and during the next few years.   PSR

Detailed comments are contained for each region with a corresponding regional graph in the attached downloadable PDF.

The PSR Truck Production Index is produced by Chris Fisher, PSR Senior Commercial Vehicle Analyst and Jim Downey, PSR Vice President- Global Data Products.