Truck manufacturers are reporting unprecedented demand as the global economy continues to recover from the pandemic. However, supply chains are struggling to keep up, especially with critical components like semiconductors in short supply. This has led to delays and uncertainty in production schedules. Many experts believe the semiconductor shortage will persist through most of 2021 and into 2022, which could further disrupt manufacturing output.
Inflationary pressures from rising material costs have also become a major concern. Steel and copper prices have surged, forcing many companies to increase prices for new trucks to maintain profitability. Despite these challenges, demand remains robust, with order books filled well into 2022 in many regions.
Below are key insights from the second quarter 2021 earnings reports of major truck manufacturers.
"The labor shortage in North America and global supply chain constraints have created a challenging environment," said CEO Chris Villavarayan. "We're seeing rapid cost increases in freight and steel that are impacting our results. While price corrections don't seem imminent, we're working closely with customers to recover some of these costs."
"Given the strong demand we see globally, we are raising our production guidance. In North America, we now expect Class 8 production to be around 285,000 units, near the upper end of our previous range. Orders are in line with expectations, with build slots full for the remainder of 2021 and 2022 order books not yet open. In Europe, we’ve increased our forecast to 415,000 units, and in Brazil, we anticipate the highest truck production since 2014," added SVP & CFO Carl Anderson.
"Strong demand across our key markets drove continued sales growth in the second quarter, particularly in North America, resulting in solid profitability," said Chairman and CEO Tom Linebarger. "The strength of the order book reflects robust underlying demand, even with the challenges we faced last year."
"Despite ongoing supply chain constraints, we’re encouraged by economic trends in several key markets, which suggest strong demand will continue through 2021 and into 2022. Freight activity in North America is growing, leading to higher spot and contract rates, and we’re seeing a rising backlog of truck orders."
"Underlying demand continues to outpace supply, and global supply chains remain constrained due to high demand and ongoing complications from the pandemic. We anticipate this situation will persist, but we’re confident in our ability to navigate through these challenges," said CFO Mark Smith.
Mike Dozier, Paccar SVP, said, "Freight tonnage, industry truck utilization, and customer demand for new trucks are all strong. Customers appreciate the enhanced fuel efficiency and advanced technology in Kenworth and Peterbilt’s latest models."
"DAF trucks are also in high demand due to their innovative design, improved fuel efficiency, and better driver comfort. European registrations for trucks over 16 tonnes are expected to reach 270,000 to 290,000 this year, with DAF holding a 16% market share."
"PACCAR Parts achieved record results driven by strong industry truck utilization, efficient supply chain management, and ongoing investments in e-commerce. Our e-commerce sales increased by 56% in Q2 compared to last year," noted David Danforth.
"While we had a good quarter, the semiconductor shortage continues to impact production. We currently expect supplier constraints to improve by the end of the year, but there's still a lot of uncertainty," said CEO Preston Feight.
"Order books are full, and the supply side will ultimately determine 2021 sales numbers. We're sold out for this year in North America, Europe, and haven't opened order books for 2022 yet. Demand remains strong, and our backlog is at an exceptional high level," said Martin Daum, CEO of Trucks & Buses.
"Demand is solid and strong, but it's all about limited production capacities and supply chain pressures."
"Higher costs for raw materials, especially steel, have had a significant negative impact on our operations. We also expect the semiconductor shortage to affect us in the second half of the year," he added.
"Freight markets remain strong, and our customers’ truck utilization is high, reflected in a strong service business and continued good order intake. Despite supply chain disturbances, we delivered nearly 46,000 trucks, though we had to temporarily halt production for almost a month," said Volvo's CEO.
"Our bus business was hit hard by the pandemic, but with restrictions easing, fleet utilization has started to improve from low levels."
"Truck markets recorded a very strong recovery worldwide, while bus markets saw significant growth in the first half of 2021," stated the Traton earnings report.
#transportation
#Heavy Duty Trucks
#International
#Cummins
#Western Star
#Freightliner
#Peterbilt
#Kenworth
#Earnings Summary
#Volvo Trucks
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Key Takeaways
Company Outlooks
Company
Outlook
Date
Meritor
Positive
8/4/2021
Cummins
Positive
8/3/2021
Paccar
Neutral
7/27/2021
Daimler
Neutral
7/21/2021
Volvo Trucks
Neutral
7/20/2021
Navistar
Neutral
6/8/2021
Meritor
Cummins
Paccar (Kenworth & Peterbilt)
View Peterbilt dealers
Daimler (Western Star and Freightliner)
View Freightliner dealers
Volvo Trucks
Navistar (International)
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Transportation Company Earnings Summary 2Q 2021