ACT Research’s (ACT) latest release of the North American Commercial Vehicle Outlook shows the heavy duty vehicle markets are at the edge of the precipice, the company says.
“Since the start of this demand up-cycle in late 2017, we have targeted this year’s third quarter as the point at which the industry was likely to see production rollover,” said Kenny Vieth, ACT’s president and senior analyst. “That targeting was largely derived from historical precedent, with historical peak-level build lasting between 13 and 15 months. For the current cycle, we date peak build rates to June 2018, so August represents the 15th month of peak-level production.”
Regarding heavy vehicle demand, Vieth noted, “At the heart of our cycle duration prediction, carrier profitability and production peaks always lag the freight cycle, so capacity building always accelerates relative to freight growth at exactly the wrong time, every time. Large new inventories and deteriorating freight and rate conditions suggest erring on the side of caution remains the right call, and we are warning those in the industry to be prepared for down weeks starting as early as Q4.”
Regarding ACT’s medium duty forecasts, Vieth said, “Retail sales are tracking the medium duty forecast very well, but 2019 expectations were moderately increased, and owing to order dynamics, our 2020 sales forecast has been reduced.”
