According to ACT Research’s (ACT) latest State of the Industry: NA Classes 5-8 Report, there has not been much change in trajectory of macro datapoints that are influencing commercial vehicle demand. Except for the asterisk that is the COVID Delta variant, economic strength is broad-based and concentrated in goods-related economic activity. However, build rates are down, with supply chains constrained.
Speaking about the supply chain, Kenny Vieth, ACT Research’s President and Senior Analyst, said, “While ‘semiconductors’ has become the generic reference for the supply-chain’s shortcomings, in actuality there are scores of parts that continue to be impacted - by the pandemic, by the lingering impact of steel tariffs, and even by the February storm that incapacitated Texas and shutdown swathes of the U.S. plastics industry for two-plus quarters. Like the supply-chains themselves, the issues are not only domestic and not only commercial vehicle.”
He added, “Semiconductors might be masking other component issues, but they are at the heart of the supply-chain’s inability to ramp production. Recent news indicates that COVID outbreaks shutdown silicon wafer and sub-assembly plants in Southeast Asia, representing another nail in the coffin of a nearer-term recovery in supply. Even as new ‘fab’ capacity is coming online this year and next, global automotive industry shutdown announcements have become weekly occurrences.”
Regarding commercial vehicle segments, Vieth commented, “After three months in which vehicle orders fell below earlier-in-the-year levels, medium and heavy-duty orders each rose to a five-month high in August, reiterating the notion that full backlogs and not a lack of demand were responsible for order weakness.” Additionally, he noted “At ACT’s Seminar 65, dealers on a panel indicated that while there are unsold vehicles, those units are vehicles not delivered, rather than trucks sitting on a lot waiting to be sold. Other anecdotes indicate that the body-builder supply-chain is adding constraints to the completion of vocational medium and heavy-duty units.”