Overall, truck demand recovered quickly after the height of the COVID-19 crisis. Cumulated order intakes and average book-to-bill ratios of 1.49 were at an all-time high in 2021,.according to an industry analysis completed by Beryllis Strategy Advisors, a firm focusing on the auto industry. The research was based on global trucking companies including Daimler, Traton, Volvo, and PACCAR, the analysis reveals several key findings of the state of the industry.
However, order intake in Q1 2022 was down 11% year-over-year due to uncertain supply chains and massive inflation. Truck manufacturers continue to suffer from an undersupply of essential components, including semiconductors and wiring harnesses.
On the positive side, global truck players increased revenue in industrial business by nearly 25% compared to Q1 2021, and cumulative operating profit (adjusted) is 8.6% above Q1 2021.
"The situation on the global truck markets remains unusual," said Martin French, Berylls' U.S. managing director, in a statement. "Demand is much higher than supply, and inflation is impacting the sales side of the business. While there are vehicle production hurdles to overcome, these are not the worst conditions to boost profits."
- Supply chains remain uncertain: The Russian - Ukraine war has added more uncertainty to already stressed global supply chains, which have only begun to recover from the sharp market decline in Q2 2020. With Shanghai being locked down due to Covid-19, there are significant risks looking forward.
- No signs of weakness on the demand side: Although there are signs of an economic slowdown on the horizon, the need for new trucks remains considerably high. There is massive pent-up demand and a huge order backlog — 2022 production is sold out.
- German OEMs have work to do: While Volvo and Paccar are very profitable with double-digit margins, Daimler and Traton need to improve performance, namely for Fuso, MAN and Navistar, which are below 5% RoS.