No End in Sight for Downturn in Commercial Vehicle Industry
Exports and production continue to decline – domestic demand shows first signs of stabilizing
Frankfurt am Main, June 5, 2009. The international commercial vehicle markets continue to feel the full impact of the global recession. The international financial and economic crisis has triggered a very sharp drop in demand in the transportation sector, thereby severely impacting the commercial vehicle business worldwide. An end to this decline - especially the decrease in foreign demand for heavy-duty commercial vehicles - is not yet in sight. Orders from abroad for commercial vehicles with GVWs over 6 tons plummeted by 77 percent in May. In the vans sector, orders from foreign buyers were down 33 percent from the level recorded in May 2008. In the first five months of 2009, incoming orders from abroad for commercial vehicles up to 6 tons fell by 45 percent, while orders for commercial vehicles over 6 tons even fell by 81 percent.
The worldwide economic downturn is also reflected in export numbers. Exports of commercial vehicles up to 6 tons decreased by 65 percent during the year to date (May: -58 percent), while export of heavy-duty vehicles dropped by 68 percent (May: -77 percent). Exports to the new EU countries and Russia in particular nearly came to a standstill. However the commercial vehicle business is also very weak in most of the Western European countries.
The market in Germany is just as unsatisfactory, although the first signs that the downturn might be bottoming out are emerging. Although orders in the heavy-duty vehicles segment were down 29 percent compared to May of last year, compared to April 2009 they have stabilized (+1 percent) when adjusted for seasonal effects - this was the fourth period of slight growth in a row. Domestic demand for vans in May was 13 percent below last year's levels. Through May, orders for light-duty commercial vehicles fell 7 percent, while manufacturers of heavy-duty commercial vehicles suffered a decline of 53 percent.
From January until May new registrations of vans in Germany were 28 percent below last year's levels, and in the month of May new van registrations fell 29 percent. Sales of vehicles over 6 tons sank by 30 percent in the year to date and by 37 percent in May. Matthias Wissmann, President of the German Association of the Automotive Industry (VDA), commented: "The German government should help revive the market by increasing its investments in road infrastructure and providing incentives to replace old vehicles with new ones." In addition, banks are facing the problem of trying to avoid the impending liquidity squeeze of structurally healthy companies in the commercial vehicles industry.
The very poor foreign business has also caused the German manufacturers to slam the brakes on production. In May their plants in Germany cut production of vehicles up to 6 tons by 48 percent and of vehicles over 6 tons by 75 percent. In the first five months of 2009, German manufacturers had to reduce their van production to 58,500 vehicles (-58 percent) and reduce output of heavy-duty commercial vehicles by 63 percent to 32,500 units.
