‘A major forecast haircut in a period of ripping demand’

The lingering shortage of semiconductors, the spread of the delta variant of COVID and constrained supplies of other components led ACT Research to dramatically reduce its projection for heavy-duty truck production on Friday.

The Columbus, Indiana-based business management consultancy lowered its Class 8 truck production forecast from 308,000 to 265,000 with “additional downside risk,” Kenny Vieth, ACT president and senior analyst, told FreightWaves.

“For North America heavy trucks, the result has been sizable gaps between build plans and actual production, especially in June and July, and prospectively in the months ahead,” he said. ”And if the factory can’t build, then the dealers can’t sell.”

One industry analyst who requested anonymity told FreightWaves that more than 250,000 Class 8 trucks across all manufacturers are red-tagged, awaiting parts before they can be delivered to customers.

“There are significant inventories of already produced vehicles where essential parts are lacking. Those vehicles are badly needed by our customers. We would like to deliver, but we are waiting for the parts.”
Martin Daum, CEO, Daimler Truck

“There are significant inventories of already produced vehicles where essential parts are lacking,” Daimler Truck CEO Martin Daum told Frankfurter Allgemeine Sonntagszeitung. “Those vehicles are badly needed by our customers. We would like to deliver, but we are waiting for the parts.”

Daimler Truck’s supply of microchips, roughly 17 sets of which are used in a single heavy-duty truck, began to tighten again in early September, according to a report quoting Daum, who lead’s Daimler’s market-leading truck business.

“Since the summer months the situation has intensified again,” Daum said.

‘Usual bearings and landmarks … don’t work’

Vieth said the production cuts in the past two months are unprecedented. Similar downward moves are impacting the trailer industry. Medium-duty truck production is a little better off because many of the manufacturers also make pickup trucks and can redirect chips to more profitable midsize trucks.

“ACT has certainly rolled back heavy-duty truck forecasts in the past,” Vieth said. “But that was when the economy weakened and freight declined. The supply-chain crisis has created a unique situation, a major forecast haircut in a period of ripping demand “At least for 2021 and certainly into early 2022, the forecast is determined by supply considerations, rather than by what demand dictates.

“In a period of a recovering economy, government stimulus, strong freight and record freight rates, rising vehicle backlogs, and falling inventories, the usual bearings and landmarks we use to guide a forecast don’t work,” he said.

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