2014 Eastern European trailer market flatlining

The instability in both Ukraine and Syria has had a real impact on the outlook for trailer demand, indeed the East European trailer market is said to be flatlining in 2014. According to a new report produced by Clear International, nearly 7,000 trailers have been wiped from the forecast for the 2014/15 period. That is in addition to the reductions made to the last forecast in March this year following the annexation of Crimea. The forecast reductions affect Russia, Ukraine, Estonia and Latvia, plus Turkey which borders Syria.

On the other hand, in the same period, some Central European countries will enjoy double digit growth in their trailer markets including Hungary, the Czech Republic, Slovenia and Croatia.
However for the region overall, 2014 will be the forth year in a row where trailer demand has hardly moved, either up or down. The assumption is that this will create pent up demand resulting in improved trailer sales in both 2015 and 2016. The risk to the forecast is of course that the political/military situation may worsen rather than improve.

The good news is that for Eastern Europe trade in goods, especially exports, reached an all time high at the end of 2013, and will continue to grow throughout 2014. Also the economic forecast is for several years of GDP and investment growth, which is likely to result in higher levels of trade and more demand for road transport. The important exceptions are Russia, Ukraine, Belarus and Turkey, according to Clear.

The report explains that road transport in Eastern Europe is different from that of the west. The demand for road transport is dominated by international journeys, unlike Western Europe where most of the traffic is national in nature. Most international goods movements are undertaken using a semi-trailer.

Accession fueled trailer demand

As a consequence, some East European countries will see significant increases in new trailer demand whereas others already have a large enough trailer fleet, and only require new trailers to replace old units. They don’t need extra trailers to expand the fleet.

Reflecting on the research, Gary Beecroft, managing director of Clear commented: “Despite the problems in the Ukraine both it and Russia will have above average trailer market growth in 2015/16 if matters settle down during the coming months. By 2016 trailer demand for the region will be back at the pre-recession level of 2008.”

The fact that many East European countries joined the EU in 2004 resulted in booming demand for trailers. In particular, semi-trailer demand rocketed as the volumes of international transport increased, both within Eastern Europe and between East and West. From 2002 to 2007 the compound annual growth rate for trailer demand was 25.7 per cent. Demand broke the 100,000 unit barrier in 2007 but fell to 40,000 in 2009.

77 per cent of goods in Europe are moved by road and most of that proportion is transported on a trailer.

The publication of the 2014 Eastern European trailer market research follows the publication of a report on the West European market, which was published in June 2014.