ACT Research: CV Industry Production Closed 2021 Strong, But Is It Sustainable?

According to ACT Research’s latest release of the North American Commercial Vehicle OUTLOOK, supply-chain constraints kept a lid on the industry’s ability to raise build rates through 2021, at least until December when a torrent of red-tagged/incomplete heavy-duty, and to a lesser extent medium-duty, units were finished.

“One of the questions we have been asked consistently since releasing December data in January’s State of the Industry Classes 5-8 Vehicles report is, ‘Are December’s production rates sustainable?’” Kenny Vieth, ACT’s president and senior analyst, said. “In an examination of semiconductor industry reporting, there is nothing to suggest any material change to the expected incremental path of recovery built into the forecasts: There were no reports of chip supply miracles at the end of 2021. Ongoing temporary shutdowns in the auto industry, comments from industry OEMs, suppliers, and new vehicle buyers all reinforce the sentiment that the [more than] 500 unit-per-day Class 8 production surge and the approximately 240 unit-per-day jump from the prevailing medium-duty production rate in December were the harvesting of low-hanging [and nearly built] fruit, which, in at least some cases, were still missing parts upon ‘completion.’”

“There remains little solid intel as to the speed and timing of semiconductor capacity improvements in 2022. It is expected that the path will be an upward, if lumpy and back-end loaded, journey that coalesces into what should be a massive market in 2023, whipped up by pent-up demand early and prebuying late. Coming as no surprise and despite demand being in place, the strength of the market in 2023 will ultimately be dictated by the unwinding of tangled supply chains in 2022,” Vieth said.

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