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Truck sales stymied by production delays and lead delivery times

While new Heavy Commercial Vehicle (HGV) registrations in Ireland saw an increase of 31.5% (2,716) in comparison to 2020 (2,066) and +2.1% on 2019 (2,659), the Society of the Irish Motor Industry (SIMI) Director General Brian Cooke is looking to see further improvement during 2022: “The difficulties arising from both COVID-19 and Brexit impacted on the supply and demand for vehicles, which made 2021 another challenging year for the Irish motor Industry. Commercial Vehicles sales also saw a significant improvement in 2021, with light commercial vehicles up over 30% on 2020, reflecting the increase in business confidence as the year progressed. The Industry is hopeful that 2022 will see further improvements in business levels.”

Fleet Transport contacted the senior executive from truck distributors here to get the overall picture and outlook for the business year ahead:

Joe Crann, Managing Director at Westward Scania, representing HGV Market leaders Scania is confident that the upward trajectory continues: “As Scania only compete in the 18 tonne GVW + market, our segmentation calculated a market increase of 20%. The market is of course more constrained by supply than demand, and our understanding is that most manufacturers are sold out for the entire year. Much will depend however on the availability of components to complete these orders, but indications are for another strong year, surpassing 2021 by a healthy margin.”

Obviously production delays have extended delivery times, are customers prepared to wait? “The component supply situation has been extremely challenging, but most customers seem to have understood our predicament, citing similar problems across all brands, and indeed market segments. Passenger cars, trailers and all sorts of goods have been impacted, and of course very few predicted the rapid growth in demand, hardly dampened at all by high input costs. Many customers are now placing orders for Q1, 2023, and salesmen are quoting based on a very limited availability as 2023 is also subject to supply constraints. Will this issue have a knock on affect on used truck demand and residual values?

“Used Scania trucks have seen even more cast iron residuals than hitherto, and with demand outstripping supply of both new and used this situation is likely to persist for some time. Used supply from the UK has dwindled somewhat, with a higher proportion of older imports being brought in to plug the gap.” Is there a growing interest from operators in alternative fuels and electromobility? The level of inquiries for alternatively fuelled trucks is currently small, but we are engaging with a number of “early adopters” to assess the viability of alternatives for their fleets. As we have so many long-term relationships built up with customers over the past 45 years we are anxious only to offer products that will prove commercially viable for them over the long term.”

What sectors are likely to change during the course of this year - Long-haul, Distribution, Construction?

“We foresee no major structural change across all sectors during the year.” Regarding new vehicle launches during 2022, what’s planned?

“The Scania dealer network will unveil their Scania Super demonstrators mid-2022. These will help customers to assess the forecasted fuel savings for their fleets and place orders for delivery in 2023.”

DAF Truck Ireland’s Simon Teevan commented: “We believe that the HGV market in 2022 will be similar to 2021. Judging by the enquiry level we are seeing there is definitely scope for improvement, however we believe that supply constraints across all manufacturers will constrain the market. As it is across the board unfortunately, customers will have little option unless they already have units on order. We have already seen a hardening of used truck values in 2021 – this is likely to continue into 2022.

Fergus Conheady, Sales Manager, MercedesBenz Commercial Vehicles said: “Huge production challenges remain. As far as we can see, this is affecting all brands. Customers unfortunately do not have a choice but to wait as there is nothing available from competitor brands if the usual supplier is unable to deliver for a period of time. Used truck demand has increased dramatically in the last 12 months which has naturally seen a strong increase in second hand values. Once these production issues are overcome, we expect to see a ‘Mini-Boom’ in truck sales. Operators who

have been unable to get their hands on new product for what will be more than two years will need to freshen up their fleets so whoever has product available [will do well]. Electric drive is the current discussion piece under the alternative fuels topic. The first RHD production for eActros for Ireland is currently scheduled for the summer of next year.”

“In relation to Market Stats, we tend to look at things a little differently. When we prepare the stats we look at vehicles above 6.0t only and we remove buses and vehicles that we consider not in the actual ‘Truck’ segment. Net result is that we saw a market of 2,246 units last year which was a growth of 19%. When looking forward to this year, based on what we know and hear, we’d be looking at a very flat market or perhaps a modest growth from the 2021 yearly figure.

Harry Nash, Managing Director, Setanta vehicle Sales (renault trucks)

added: “Personally, I think the market size will be similar to last year with supply constraints causing pent up demand. The lead-times and when trucks actually arrive, especially bodied ones, will impact heavily on registrations if they are

delayed until late in the year. These will likely roll over until 2023.

Obviously production delays have extended delivery times, so are customers prepared to wait? Like the last time over ten years ago when there were delays in delivery, Harry suspects some operators may be double

ordering and the supplier that delivers first will get the business. “However, this is hard to measure,” he said. “Some of the demand will turn into second hand purchases for those who cannot or will not wait but good fresh used vehicles won’t become available until new trucks start to flow in volume later this year.”

“That said, used truck demand is high and supply is short which has inflated the used truck prices considerably, especially 2/3/4 year old kit. This however will reverse as new supply comes on stream properly in late 2022 and early 2023.”

“Customers are interested in looking and learning about alternative fuels and power options but commitment on the HGV side is slow and needs Government incentives or diesel penalties to accelerate this market. The van uptake on electromobility is a bit better on this front. Regarding the outlook, Harry sees changes in the sectors: “The construction segment will remain steady in 2022, likewise in distribution. The long haul landscape is changing slightly with more hauliers flagging out part of their fleet to the UK and further afield, leading to the 4x2 LHD tractor-unit market becoming more popular again for direct European ferry work.” He looks forward to increased take up on the recently launched TCK Evolution series during 2022 and with Euro 7 compliant engines being added later this year.

Text: Jarlath Sweeney – editor@fleet.

SIMI StatIStICS – NEw HEavy & MEDIUM DUty CoMMErCIaL vEHICLE rEGIStratIoNS 2021

Totals: 2021 Marketplace: 2,272 units v 2020 Marketplace 1,936 units = +336 (+17.36%)

raNK MaKE 2021 UNItS 2021 % SHarE

1 SCANIA

2 VOLVO 661 s 29.09% s 384 t 19.83% t

3 DAF TRUCKS

4 RENAULT TRUCKS

5 MERCEDES-BENZ

6 MAN 342 t 15.05% t 251 s 11.05% t 229 s 10.08% s 115 l 5.06% t

7 IVECO 81 t 3.57% t

8 DENNIS EAGLE 5 l

0.22% l 9 ISUZU TRUCKS (Medium) 102 s 4.49% s 10 FUSO TRUCKS (Medium) 49 t 2.16% t