European trailer outlook ‘slightly improved’ after Q3 results

In May, analysts reported that Q2 European trailer registrations were 44 per cent down and that full-year 2020 trailer registrations were set to be down north of 28 per cent. Now however, the same analysts – Clear International – are echoing the findings of other indicators and suggesting that things will turn out slightly better than expected this year.

Since the last report in May, most West European countries have had their forecasts for 2020 economic growth downgraded again. All forecasts now show negative GDP growth of between -6 per cent and -11 per cent in 2020, with every country in recession during this year. Things are worse when it comes to investment. Investment growth rates have been falling since 2017/18. It is not surprising, therefore, that 10 countries in Western Europe saw falls in trailer demand in 2019 and the remaining five posted only small gains.

UK trailer registrations 33 per cent worse than average

In 2020 however, the average fall in new trailer registrations will be 22 per cent with the UK falling by 29 per cent. On the assumption that the second wave of covid-19 is kept under control (which remains to be seen), Clear International envisages double digit growth of trailer demand in 2021. However, this will not be sufficient to recover the sales lost in 2020 – it will be several years before we see a return to the levels of trailer demand witnessed in 2018.

Production of trailers was at the third highest level on record in 2018 (though well short of the 2007 figure). Therefore, pre‑covid-19, the industry was achieving both high levels of output and stability. The total fall in registrations from 2018 to 2020 will be 24 per cent and the fall in production will be 28 per cent, according to the analysts, who added the following predictions:

“The trailer parc (fleet size) will suffer a small fall in 2020 then grow very slowly in the two years that follow. At the time of writing the corona virus outbreak is escalating in its effect on Western Europe, with the number of new infections and deaths increasing. New restrictions are being put in place on a regular basis. France, Germany, Austria and the UK have gone back into lockdown. The danger is that with no vaccine likely to be widely available before mid-2021, the second and third waves of infection will partly shut down economies once more.

“The impact of the new restrictions and lockdowns on the 2020 forecast figures will be fairly negligible. However, the growth level in 2021 may be affected as business confidence takes a knock. The forecast for 2022 registrations will not change to any substantial degree. Any sales lost in 2021 will be made up in 2022.”

In short, Clear International believes: “Reduced trade will lead to a reduction in the demand for road transport and hence reduced demand for new trailers. Both the value of international trade and the demand for road transport (measured in tonne-km) grew quite strongly in the 2016-18 period, but these activities stalled in some countries and regions in 2019, and will decline markedly in 2020.”