Western European trailer registrations set for new record

2018-06-22 09:41
From 2017-2021, trailer registrations for the Western European market are forecast to be higher than any five year period in history. This could have a positive spin-off for GRW via its tie-up with Schmitz Cargobull AG, the largest trailer manufacturer in Europe.

The UK-based CLEAR International consulting group has just issued its latest forecast for the West European trailer market and since its last report, there has been a further improvement in the short term outlook for some West European economies. As a consequence, the forecast of a slowdown in demand for trailers in the region during 2018 has changed.

So why should this be of any interest to us in South Africa? Well, let’s see what CLEAR has to say regarding its forecasts and then we’ll get to how it could have a benefit to South Africa via a local company.

According to the report, instead of demand dropping by approximately 4% in 2018, an increase in demand of 1% is now forecast. Although seven of the fifteen West European countries will see small declines in trailer registrations, the remaining eight will see some growth, particularly in the first half of the year.

Nevertheless, CLEAR still expects a 10% fall in trailer demand in 2019 with a wide variation across the countries of the region ranging from -2% to -22%. Given that the economic outlook for Europe continues to improve, why is the trailer market forecast down in 2019?

The reason, according to CLEAR, is because the catch up demand that has been pushing the market is now over. The trailer parc is fully replenished despite the fact that road transport demand has yet to return to 2006 (pre-Global Financial Crisis) levels. Furthermore, it is nine years since the decimation of the trailer market in 2009 and the market has never gone ten years without a slowdown.

In addition, trailer demand will reach a very high level in 2018, only rivalled by 2007 and 2008, both these years having had an unnaturally high level of trailer sales largely brought on by the number of countries that joined the EU in 2004-07. All these factors point to a fall in demand for new trailers in 2019. Fortunately for the industry, the fall will be relatively modest and short-lived.

So, should the industry be panicking over the forecast fall in the market? Arguably not says CLEAR! From 2017-2021, trailer registrations are forecast to be higher than any five year period in history, even though that will include 2019 when, as mentioned above, demand is forecast weaker. The previous record breaking five year period was from 2004-2008.

Not only will registrations set a new record during the forecast period but trailer production will achieve the same result. The industry is therefore facing both high levels of output and relative stability in what is traditionally a volatile sector of the vehicle market.

The outcome of these changes is that over 30 000 trailers have been added to the forecast during the 2018-2022 period, more than half of that number in 2018/2019. Most of these extra trailers added to the forecast will be sold in Denmark, Germany, France, the Netherlands, Austria and Belgium. Ireland is likely to feel the negative impact of the UK Brexit in the short term.

Interesting stuff and South Africa could well benefit from this long term positive forecast. How so? Well, as reported in a past edition of FleetWatch, Schmitz Cargobull AG, the largest trailer manufacturer in Europe, last year acquired 33% of the shares in GRW Holdings (Pty) Ltd. As stated in the article at the time, not only does this development give GRW access to all the latest technology coming out of Europe, but it also opens up markets through Schmitz Cargobull’s extensive network in Europe, Eastern Europe and Russia where the company has some 440 sales points.

And a little bird came winging past FleetWatch’s window not long ago and whispered that GRW will, for the first time ever, be exhibiting a totally South African made product on the upcoming IAA show in Hannover. We’re not sure what trailer – or tanker – it will be but as far as we are aware, this is the first time a South African trailer will be seen at the IAA show. Yay! Bring it on!

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