ACT Research: Commercial Vehicle Market Expectations Move Higher



According to ACT Research’s latest release of the North American Commercial Vehicle OUTLOOK, even before the COVID-19 pandemic plunge in Q2/20, there was never serious doubt that the demand for commercial vehicles would rise in 2021.

“While the ‘whether’ of the direction of industry demand in 2021 from 2020 has never been in doubt, the speed of the demand inflection has proven to be a particularly challenging answer,” Kenny Vieth, president and senior analyst of ACT Research, said. “Demand is sufficiently strong at present that we are turning to historical precedent as a guide for the speed at which the heavy-duty OEMs and suppliers can respond to the demand rally. On top of that, there are two countervailing considerations that we believe could have a direct bearing on the trajectory of the ramp.

“The first is the challenge of increasing manufacturing employment during a pandemic, with the added protocols and complexity needed to keep workers safe and socially distanced. The industry can only build as fast as the slowest supplier. The second consideration is the time it takes for the industry to shift to materially higher build rates following the start of robust orders. In most cycles the lag is typically around six months. Given the current unemployment rate of nearly 7%, our forecast anticipates that the industry’s ability to ramp production should be close to the typical cycle as opposed to the 2018 cycle, when higher build rates took nine months due to the constraining nature of a less-than 4% unemployment rate at that time.”

The N.A. CV OUTLOOK is a report that forecasts the future of the industry, looking at the next one to five years, with the objective of giving OEMs, Tier 1 and Tier 2 suppliers, and investment firms the information needed to plan accordingly for what is to come. The report provides an overview of the North American markets and takes a dive into relevant, current market activity to highlight orders, production, and backlogs, shedding light on the forecast.

Additionally, ACT Research recently announced plans for a new multi-client study focusing on electrification of the commercial vehicle industry to be released in 2021. The scope of the study will include unit sales for the U.S. and Canada annually from 2020 to 2030, with single-year outlooks for 2035 and 2040.

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