Presenting the results of a recent study of 50 trucking industry executives from throughout the world, Juergen Reers, a partner at Roland Berger Strategy Consultants, said that despite the recession, the trucking industry will continue toward further globalization.
“The future is global,” says Reers. “Coming out of this current crisis is the next stage of globalization.”
Reers provided an overview of the study, “Truck Industry 2020: The Future Is Global,” during this week’s Heavy Duty Dialogue in Las Vegas, Nev. He notes that commercial vehicle sales declined significantly throughout the world during the recession, with the exception of China. The downturn in truck sales resulted in revenue and profitability plummeting for truck industry businesses.
New commercial vehicle sales were off between 30 to 60 percent worldwide, and supplier revenue declined 30 to 50 percent globally. As a result of these conditions, debt rose significantly as companies borrowed to stay viable, while equity declined as facilities were shuttered and resources either were jettisoned or scaled down.
Reers says these factors have put the supplier community in severe distress that must be overcome before capitalizing on post-recession opportunities, including expanding into emerging markets in other countries.
Globalization also will result in new commercial vehicle manufacturers in those emerging markets and greater exports of their vehicles to more established markets. For instance, emerging market OEMs are expected to grow their sales abroad by 14 percent by the year 2020.
Reers also noted there will be more partnerships between these emerging market manufacturers and today’s triad manufacturers – those in the United States, Western Europe and Japan. He says emerging market OEMs either will partner with the triad OEMs to penetrate triad markets or will go at it alone, primarily to serve niche customer needs, such as those wanting low-cost equipment to operate.
