Truck Industry

With economic growth levels receding in the developed markets as a whole, truck sales have also declined. Sales in Europe recovered marginally in 2003, but were nowhere near the levels seen in 2000 (see Europe auto industry). In the UK truck industry, sales of trucks under 3.5 tons grew 14 percent in 2003 while those above 3.5 tons grew 7 percent (see UK auto industry). Increased investments in infrastructure helped both India and China make higher than normal growth in truck sales for 2003 (see China auto industry and India auto industry).

India, China, Central and Eastern Europe are augmenting their infrastructure significantly. In addition, the average age of trucks on the roads of developed countries is quite high. Both these factors will drive demand for trucks. The global truck market is projected to grow at a rate of 5 percent per annum, attaining a market size of over 12 million units by 2008, see figure 49 overleaf. Purchase full report here.

In the US truck industry, demand for heavy duty trucks (Class 7 and Class 8) has fallen in the last few years while that of medium duty trucks (Class 4, 5 and 6) has grown. The average age of commercial trucks on the road, however, is 5.9 years - a 10-year high. This will keep replacement demand high in the coming years.  Sales in Western Europe have been falling continuously whereas in Central and Eastern Europe, sales are on the rise but volumes are still small. In the developed market of Western Europe, where the transport industry and distribution systems are quite advanced, product reliability and a proper service network will enable players in the truck industry to have an edge over their competitors.

The developing markets of Central and Eastern Europe are dominated by used cars from the West, however, with the enlargement of the EU, as well as the transfer of manufacturing operations to these regions from elsewhere, these regions are expected to witness sustained economic growth and thus investments in infrastructure. This will drive truck sales in the next few years. Commercial vehicles sales in the United Kingdom witnessed an increase of 13.58 percent in the five years 1999-2003 and are likely to grow further with strong business demand and high price competition among market players.

In the Japan truck industry, commercial vehicle sales are likely to remain stagnant as economy is not showing any signs of a significant revival (see Japan auto industry). In the emerging markets of India and China, robust economic growth powered by large scale capital investments in infrastructure and manufacturing sectors will drive growth in the next few years.

The market for heavy trucks in the US, Europe and Japan is likely to remain dull in the coming years. Margins from sales of trucks will be very minimal and therefore efforts will be towards developing a service network, which will generate revenue in the long term. Major players in the world market are predominantly from the mature markets and their efforts to penetrate the emerging regions will be difficult as local players have a better understanding of the market, a well established distribution network and are firmly entrenched. Light trucks are likely to record positive growth globally, excluding Japan.

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