According to ACT Research’s latest State of the Industry: N.A. Classes 5-8 Report, with demand for commercial vehicles surging, much depends on the opening of the OEMs’ 2022 order books.
“There are times in the cycle where other variables supplant orders as the most critical in terms of industry understanding,” said Kenny Vieth, ACT Research’s president and senior analyst. “With backlogs stretching to double-digit ratio levels, it is no longer orders that are top of mind, but the industry’s ability to convert those orders into product. Like every other upcycle, this one has been beset with traditional production constraints: foundries, tires, wiring harnesses, labor, etc. Unlike every other upcycle, the ‘it’s-different-this-time’ factors have been particularly egregious: COVID, steel, resin, foam and semiconductors have been nearly continuous supply-chain hurdles. Where upcycle constraints typically last deep into Q2, these appear sticky into the second half of 2021.”
By commercial vehicle segment, Vieth commented, “With Class 8 build missing to the downside, backlog came in above preliminary expectations. After being oversubscribed since the end of last year, our backlog analysis shows that much of the order overhang that marked the six-month build outlook has migrated into future quarters. That said and despite supply-chain challenges, truckers still want trucks. For the medium-duty segment, a big change in the underlying market has been the resumption of school bus demand and waning RV demand, as vaccinations continue to allow economic reopening. Orders above build here are also adding to industry backlogs.”