The situation for commercial vehicles, trailers, bodies and buses
The USA was the growth locomotive in the global commercial vehicle market in 2014. Since the real estate and economic crisis, the US market has celebrated an impressive comeback. With 407,000 heavy units it posted growth of 16 percent. Sales increased for the fifth successive year.
For the BRIC countries, on the other hand, 2014 was a weak year. Only the Indian market matched the previous year's low volume. In China, the heavy goods vehicle market slumped by 6 percent to 992,000 units. Brazil and Russia are faced with a substantial sales crisis, which will continue in 2015.
Developments in the West European market for heavy commercial vehicles weighing more than 6 metric tons were driven by the introduction of the new Euro VI emission standards on 1 January. At the end of 2013, carriers and fleet operators were still ordering large numbers of vehicles of the older Euro V emission standard. This resulted – especially in December 2013 – in a massive preemptive purchase effect. As a result, new registrations in Western Europe in this month rose 127 percent. The increase in the German market was 91 percent. This effect was particularly pronounced in the United Kingdom with an increase of 237 percent. An additional incentive program for the early purchase of more environmentally friendly Euro VI vehicles acted as a boost. In total, with 248,400 units, new registrations in Western Europe were up 5 percent in 2013. This preemptive effect also shaped market developments in 2014 as those registrations were absent over the course of the year and the base effect, especially in the final quarter, should create a massive fall. As, however, vehicles ordered and made in 2013 were still allowed to be registered in 2014, sales in the first half of the year were still at a moderate level, new registrations were not entering negative territory until August. In October, however, they again turned positive. This in turn was attributable to a special effect in Great Britain: the new whole vehicle type approval that came into force at the end of October ensured that new British registrations again increased by 72 percent. In November (-21 percent) and December (-53 percent) the West European preemptive purchase effect finally kicked in. The market finished the full year with a fall of 8 percent, achieving a volume of 227,400 units. The fall was thus more moderate than had been initially assumed.
The trailer and body manufacturers’ economic position in 2014 was stable and characterized by a fundamentally sound sales performance. The pent-up investment restraint throughout 2013 as a result of the transition from Euro V to Euro VI eased significantly. Nevertheless, the Russia-Ukraine crisis throughout the rest of the year created increasing uncertainty for the regions directly affected and neighboring countries. These developments negatively impacted both the pre-owned markets as well as new investment in Russia and the neighboring Eastern European countries.
Despite that, trailer sales in 2014 were 9 percent up on the previous year, totaling
271,300 units. Gratifying increases of almost 13 percent – just shy of 30,500 units – were to be seen for newly registered articulated trailers and multi-axle trailers (plus 8 percent). Overall, measured by turnover, trailer and body manufacturers in 2014 posted a good performance for the year as a whole. The total of 9.8 billion euros of domestic and foreign turnover was a 15 percent increase compared with the year before.
In the European vehicle market the German trailer manufacturers in particular successfully defended, and in some cases increased, their high market shares. For example, exports of articulated trailers from Germany grew 11 percent.
As the most important market for pre-owned and new commercial vehicles and trailers, Russia suffered significant losses as a result of political developments. The slump that had already begun in 2013 intensified, resulting in a 48 percent drop in the preowned trailer and body sector. The year 2014 saw an approximately 60 percent slump. The value of new vehicle exports fell by 40 percent compared with the year before.
The fundamentally positive employment picture for Germany’s medium-sized trailer and body manufacturers continued in 2014. The outcome for the year was growth of 3 percent, to an average of 32,300 employees in the sector. Nevertheless, especially for small companies, the extraordinarily large fluctuations in demand occurring at short notice in the commercial vehicle sector pose considerable challenges in terms of flexibility and resource planning.
Important indicators of the prospects for logistics markets point to a deterioration of the business outlook for road freight transport in Germany and Europe. According to industry estimates, such as the half-yearly economic poll of Manufacturer Group II, the German and Western European markets for trailers and bodies will not develop any significant momentum. Admittedly the rapid falls in oil prices should have a positive impact on transport and logistics markets. Risks remain as regards the economic performance in important European export markets. The foreign trade stimulus for German trailer and body manufacturers will therefore remain limited.
The bus market in Germany and Europe
Following growth in 2013 (+3 percent, 30,400 buses), in 2014 the West European bus market dipped slightly by -2 percent to around 29,800. A slight -3 percent dip (5,700 vehicles) in new bus registrations was also seen in Germany. One likely cause of the slight fall in demand is that the need for replacements from municipal orders for local public transport is materializing only slowly. Whereas around 680,000 public buses and long-distance coaches were in operation in Europe, the vehicle fleet in Germany was unchanged at approximately 77,500 vehicles. In Germany alone, buses carried almost 5.4 billion passengers per year, accounting for almost half the traffic volume. That makes buses the most important means of public transport, even ahead of underground trains, trams and rail. The high quality requirements on local public transport and compliance with emissions and environmental standards require continuous renewal of the vehicle fleet. However, the bus markets in Germany and Western Europe are largely saturated and remain at a lower overall level.
The liberalization of the long-distance coach market was one of a number of sources of fresh momentum for German manufacturers. The number of long-distance coach services and passengers has increased rapidly. In the very first year of market liberalization around 8.3 million passengers took advantage of the new offerings. By the end of 2014, more than 15 million people in Germany had traveled by long-distance coach. As a low-cost and environmentally friendly alternative, the long-distance coach, with 5,000 journeys per week, has established itself as the fourth pillar of long-haul travel, alongside rail, the passenger car and air. According to estimates, market liberalization is likely to go hand-in-hand with an additional requirement for several hundred vehicles per year. Moreover, because long-distance coaches come in for intensive use, a corresponding replacement investment requirement can be anticipated after only four to five years.
The intense competition in the long-distance coach market has resulted in an initial round of consolidation, which will continue. In the medium term, it is anticipated that the German long-distance coach market will be dominated by three or four large companies, or groups of companies. Contrary to initial fears in some quarters, the opening up of the long-distance coach market has also created new opportunities for numerous medium-sized coach operators below the major umbrella brands. As such they have, as before, a major role to play in the German coach market.
Information on medium-sized enterprises in the commercial vehicle industry can be found in Chapter “Suppliers and small and medium-sized enterprises.”