East European trailer market hit again, but regional nadir also reached

Recession, sanctions plus the plummeting oil price has had a devastating impact on the outlook for trailer demand in Russia. A year ago Clear International’s analysis suggested 24,000 trailers were wiped from the forecast published in March 2015. Six months ago a further 8,000 trailers were removed from the prognosis. In the current forecast yet another 4,000 trailers have been removed from the Russian outlook.

There have also been reductions of 1,200 trailers in Belarus and 500 units in The Ukraine. However, the news for the region is not all negative. In every country, other than those mentioned above, the forecast for trailer demand has improved. Furthermore, the improvements are substantial enough to outweigh the reduced trailer demand in Russia, Belarus and The Ukraine, so that 14,000 trailers have been added to the forecast for the region. New trailer demand will exceed the pre-financial crisis levels of 2006 in both 2016 and 2017.

Even though the outlook for Russia has worsened, 2015 will be the nadir for the market and demand will grow in all years but one to 2020. The Ukraine and Belarus will follow the same pattern.

As a consequence Russia, always the largest market for trailers in Eastern Europe until 2010, has fallen behind Turkey and Poland. Similarly the Ukraine and Belarus have been overtaken by Hungary and the Czech Republic.

The East European trade in goods reached an all-time high at the end of 2013, but the growth was choked off in the second half of 2014, again as a result of the situation in Russia, the Ukraine and Belarus.

The economic forecast for Eastern Europe is for two years of positive GDP and investment growth in 2016/17, which will result in recovering levels of trade and more demand for road transport. Only Russia and Belarus will have negative GDP in 2016.

In 2016 growth in trailer demand is forecast in all but two of the fifteen countries in the region. Bulgaria and Lithuania will see falls in trailer demand largely as a result of having had very strong trailer sales in 2015. Further market growth in 2017 will be wholly dependent on whether a sustainable recovery is underway in Russia.