TPI Truck Production Index www.powersys.com +1-651-95-8 info@powersys.com 2nd Quarter Power Systems Research Global Truck Production Index (PSR-TPI) jumps 14.3%, QOQ ST. PAUL, MN (JULY 9, ) The Power Systems Research Truck Production Index (PSR-TPI) jumped from 98 to 112, or 14.3%, for the three-month period ended June 3,, compared to the first quarter of. The year-over-year (second quarter of through the second quarter of ) gain for the PSR TPI was, 111 to 112, or 1%. From the base period of the second quarter, the PSR TPI slipped a bit, dropping one point from 113 to 112. The PSR TPI measures truck production globally and across six regions: North America, China, Europe, South America, Japan & Korea and Emerging Markets. This data comes from CV Link, the proprietary database maintained by Power Systems Research. While overall global demand for medium and heavy commercial vehicles will be flat this year, the regional markets will vary widely. Production levels will remain high in North America driven by tight capacity, higher freight rates and the need for the fleets to continue replacing and expand capacity. The class 8 market will perform particularly well this year with production expected to finish around 33, 335, trucks. On a regional basis, this is what we see. North America: Demand continues to be strong in both the medium and heavy duty truck segments driven by an improved construction segment along with tight trucking capacity and higher freight rates. In the class 8 segment, orders have started to decline as build slots have all but filled up for the remainder of the year. The OEM s also have a significant backlog they are working through. South America: In South America, commercial vehicle demand is down sharply due to the poor economic conditions. In Brazil, business sentiment and consumer confidence is currently very low. This along with stricter credit standards will continue to pressure vehicle demand through the rest of this year and likely into. It will likely be 18 before demand returns to a more normal level. Japan and Korea: In Japan, the increased consumption tax which was implemented in April continues to be a drag on the economy. However, a modest recovery is expected this year. The South Korean economy continues to be sluggish primarily due to softness in their export TPI authors Chris Fisher is the senior commercial vehicle analyst at Power Systems Research. Jim Downey is vice president of global research operations at Power Systems Research.
markets. Commercial vehicle production for Japan and South Korea is forecasted to increase by 2.8% this year over. In, Japanese production is expected to increase by 2.7% while South Korean production is forecasted to finish 2.9% higher than last year. Europe: While medium and heavy truck demand continues to be soft, it appears the worst is over in Western Europe as demand has started to firm up. The PSR production forecast for, has been revised to reflect a 6% increase over last year. However, demand in Russia has fallen sharply and is expected to decline by 25% - 3% this year primarily due to the weakness in oil and the continued sanctions imposed by the United States and the European Union. Greater China: Despite implementing various stimulus plans, the Chinese economy continues to decline primarily due to past excesses in lending, housing and industrial overcapacity. Overall, commercial vehicle production is expected to decline by 8.4% this year with heavy truck production declining by 18%. Commercial vehicle demand is expected to remain soft during the next few years. South Asia: South Asia medium and heavy commercial vehicle production is expected to increase by 17.1% in primarily driven by Indian production. Production in India has increased sharply compared with last year. This is primarily due to the positive business sentiment, the firm freight rates, improved freight availability, a lower fuel price, easing of inflation and improved profitability of operators and an early kickin of replacement cycle. In Northern India, a number of infrastructure projects are expected to begin thus encouraging the truck owners to replace older vehicles. Also in the North, increased transportation of agricultural products bodes well for truck demand moving forward. The extension of excise concessions has further helped inspire confidence in truck owners on replacing and expanding their fleet. In January of this year, the central bank initiated monetary easing which should stimulate credit growth and boost domestic demand for goods and services. The next update of the Power Systems Research TPI will be in October and will reflect changes in the TPI during 3Q. PSR Power Systems Research Global Truck Production Index BASE China 141 19 15 115 1 125 124 13 Emerging Markets 114 116 75 83 91 93 83 87 Europe 16 11 18 12 18 112 111 95 16 Japan & Korea 96 112 18 14 117 113 11 16 North America 86 76 8 85 86 8 85 95 12 South America 115 118 122 125 143 148 153 121 14 Global 113 15 13 11 15 116 111 17 111 Total Volume 1,226,537 1,388,155 1,282,945 1,263,961 1,2,57 1,29,6 1,417,566 1,355,653 1,312,647 1,367,121 China 99 113 96 13 18 125 17 112 Emerging Markets 91 87 93 14 18 11 14 11 115 Europe 12 13 96 17 12 111 111 129 11 14 Japan & Korea 124 111 116 125 113 119 122 128 North America 94 92 12 111 11 13 89 13 97 98 South America 14 97 75 79 82 88 83 89 91 97 Global 11 14 98 112 13 19 12 117 16 11 Total Volume 1,241,284 1,279,562 1,5,61 1,378,577 1,266,653 1,338,18 1,251,651 1,431, 1,3,398 1,352,162 Source: CV Link www.powersys.com +1-651-95-8 info@powersys.com
18 All Regions 16 1 8 6 China Emerging Markets Europe Japan & Korea North America South America Global Production by region will vary greatly this year and into with North America and South Asia having very strong years while Western Europe gains strength and Eastern Europe further declines. South America and Greater China are expected to continue to decline through. Global Index 115 11 15 95 9 85 Global Linear (Global) The global economy continues to be unsteady due to various political and economic uncertainties. While overall production levels are expected to remain slightly positive, it is expected to be a choppy ride. www.powersys.com +1-651-95-8 info@powersys.com
North America Index 8 6 North America Linear (North America) Demand continues to be strong in both the medium and heavy duty truck segments driven by an improved construction segment along with tight trucking capacity and higher freight rates. In the class 8 segment, orders have started to decline as build slots have all but filled up for the remainder of the year. 18 South America Index 16 1 8 6 South America Linear (South America) In South America, commercial vehicle demand is down sharply due to the poor economic conditions. In Brazil, business sentiment and consumer confidence is currently very low. This along with stricter credit standards will continue to pressure vehicle demand through the rest of this year and likely into. www.powersys.com +1-651-95-8 info@powersys.com
1 Europe Index 8 6 Europe Linear (Europe) While medium and heavy truck demand continues to be soft, it appears the worst may be over in Western Europe as demand has started to firm up. However, demand in Russia has fallen sharply and is expected to decline by 25% - 3% this year primarily due to the weakness oil and the continued sanctions imposed by the United States and the European Union. Japan & Korea Index 1 8 6 Japan & Korea Linear (Japan & Korea) Demand continues to be strong in both the medium and heavy duty truck segments driven by an improved construction segment along with tight trucking capacity and higher freight rates. In the class 8 segment, orders have started to decline as build slots have all but filled up for the remainder of the year. www.powersys.com +1-651-95-8 info@powersys.com
16 China Index 1 8 6 China Linear (China) Despite implementing various stimulus plans, the Chinese economy continues to decline primarily due to past excesses in lending, housing and industrial overcapacity. Commercial vehicle demand is expected to remain soft during the next few years. 1 Emerging Markets Index 8 6 Emerging Markets Linear (Emerging Markets) South Asia medium and heavy commercial vehicle production is expected to increase by 17% in primarily driven by Indian production. Production in India has increased sharply compared with last year. In January of this year, the central bank initiated monetary easing which should stimulate credit growth and boost domestic demand for goods and services. www.powersys.com +1-651-95-8 info@powersys.com
Chris Fisher is senior commercial analyst for Power Systems Research (PSR), and Jim Downey is vice president of global research operations at PSR. The company has been tracking the production of engines and their use around the world for nearly years. We re the leading company in the world doing this research and building these databases. We have many of the largest companies in the world as our customers, including John Deere and Caterpillar. They subscribe to our unique databases, and their facilities around the world access our data and forecasts through the Internet 24/7. We re based in St. Paul, Minnesota, USA, and we have offices and analysts located around the world, from Brussels to Beijing and Tokyo to Brazil, to help us collect and analyze this data. For information on our products and services, call +1 651-95-8 or email us at info@powersys.com. Learn more about Power Systems Research at www.powersys.com. Headquarters St. Paul, USA +1 (651) 95-8 info@powersys.com Sao Paulo, Brazil +55 19 335-5657 infosa@powersys.com Beijing, China +86 189 129 8891 infocn@powersys.com Brussels, Belgium +32 2 643 2828 infobr@powersys.com Detroit, USA +1 (734) 761 34 infode@powersys.com Moscow, Russia +32 2 643 2828 inforu@powersys.com Tokyo, Japan +81 9 9139 934 infojp@powersys.com Riyadh, Saudi Arabia +966 11 465 9898 infoae@powersys.com