With its over 60 years of professional expertise in the automotive and transportation industry, DuckerFrontier has made heavy duty truck and related products a core segment. The onset of Covid-19 provided no distraction from DuckerFrontier’s focus, first analyzing the impact of the pandemic on the automotive industry in its March 2020 report Covid-19 and Global Automotive Supply Chain Disruptions. The DuckerFrontier Automotive and Transportation team has continued to analyze the impact on the commercial truck market to assist suppliers, manufacturers and other industry participants understand current production forecasts, sales and market trend impacts to determine how to best operate.
Pandemic Impact to Commercial Truck Production
As history demonstrates, medium and heavy-duty commercial vehicle production cycles average eight to ten years. The next expected production decline has begun, with a continuation into 2021; return to growth is anticipated for 2022 and thereafter.
As a result of Covid-19, the impact specifically on Class 8 commercial vehicle sales and production forecasts continues to be analyzed. A stronger recovery is expected in 2021 than originally projected; production is not anticipated to be as disrupted and commercial vehicle operators will continue to replace older models and/or expand fleet capacity to meet increased logistic demand. Further, continued maintenance schedules for vehicles in operation will demand suppliers providing service and aftermarket parts including wheel-end-systems to operate at pre-Covid levels.
Leading Industry Trends Utilizing Advanced Technology
The commercial vehicle industry is observing five predominant trends utilizing advanced technologies to enhance logistics and comply with regulations, while aiming to optimize cost per mile traveled.
There is growing interest for electrification coming from Class 8 brands, models such as Freightliner’s e-Cascadia, and upcoming programs, such as Navistar’s NEXT eMobility Solutions initiative and Volvo’s Lights projects. Additionally, newcomers are creating hype in the heavy-duty truck segment with Tesla teasing about its Semi electric truck and Nikola Motors coming up with fuel cell technology for faster charge and longer range.
In the meantime, regulations are indicating a strong inclination for adoption of electrified trucks. Following an initiative from California, 15 states and the District of Columbia have signed a Memorandum of Understanding (MOU) to accelerate the adoption of medium and heavy-duty truck electrification. The intention is to reach 30% penetration of electric vehicles in the new truck market by 2030, a goal of 100% by the year 2050.
The combination of the industry initiative and the MOU are increasing investor’s interests with major investments benefiting all market participants from light commercial vehicles to heavy-duty class 8 trucks:
DuckerFrontier’s Automotive and Transportation team continues to follow and analyze the key trends and impacting the automotive and transportation industry, both during and post Covid-19 disruptions. Visit our Covid-19 Resource Hub for the latest insights and implications for global business, or contact us to connect with a team member.