ACT Research is slashing its production forecasts for this year and next, as truck makers cope with supply issues.
“In the current period of [near] record demand for commercial vehicles of all stripes, the story the past few months has shifted from one of abundance to one of constraint,” said Kenny Vieth, ACT’s president and senior analyst.
“While we say ‘semiconductors’ as a generic reference to the supply-chain’s shortcomings, in actuality there are scores of parts that continue to be impacted by the pandemic, by the lingering impact of steel tariffs, and even by the February storm that incapacitated Texas and shutdown swathes of the US plastics industry for two-plus quarters.”
While the much-publicized semiconductor shortage steals the headlines, Vieth said that masks other shortages that are affecting commercial vehicle build rates.
Class 8 orders are no longer aligned with build rates due to the parts shortages. Vieth said the industry should have produced about 30,000 Class 8 trucks in July based on orders but instead build just 14,820 units.
“Industry volume forecasting is typically a demand-side exercise,” Vieth said. “For Class 8, we cut 2021 build expectations for a second consecutive month, but the story is materially different in the medium-duty sector. We attribute the smoother outcomes to date in Classes 5-7 to the fact that the large passenger vehicle-based market participants are able to pull chips from smaller, lower margin pick-up trucks and put those chips into medium-duty vehicles. Of course, the opposite is also happening amongst the Classes 5-8 producing CV OEMs, with the medium-duty market shedding chips into Class 8.”