Heavy Truck Manufacturers Foresee a Rough Year in the US
IVsource.net
27 January 2001

A quick look at prospects for truck-buying in the US, and how economies in Europe may have an impact.

Heavy vehicle manufacturer PACCAR predicted on January 12 that US output of heavy trucks would likely fall by about 45% this year.  The gloomy news was offered at the Brussels International Commercial Vehicles Show and was echoed by Volvo and DaimlerChrysler.

Total US production is expected to reach just 130,000 vehicle this year, down from 240,000 in 2000.  Production has been cut sharply throughout the industry, and at least 9,000 workers have been laid off.   Lower US demand reflects both excess new stock and a surplus of used vehicles, as well as the double whammy of higher interest rates and fuel costs.

Volvo Truck Corporation President Tryggve Stehn agreed with the slowdown predictions, "but we hope for a rebound in the second half."  Volvo said market pressures could be offset by synergy savings from its acquisition of Renault VI and Mack Trucks, which became official this month.  Volvo is expecting to see $380M in savings over the next two years as a result.

Growth in Europe is expected to help lift commercial vehicle revenues for the worldwide companies -- PACCAR (which owns DAF), DaimlerChrysler, and Volvo.  Here, commercial vehicle revenues could grow by as much as 5%, according to DaimlerChrysler's Eckhard Cordes, president of their commercial vehicles division. 

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