Most goods in Europe move by road and most of that on a trailer. For this reason, the trailer market is a good indicator of the state of an economy.
In the five years ending in 2007, compound growth in the East European markets was 27% p.a. In the first half of 2008 it had been hoped that the buoyant markets in the East would continue growing, or at least not shrink. However, in 2008 the market shrank by 11%, which was a much bigger fall than in Western Europe. The Baltic countries were the worst affected, whilst Turkey, Ukraine and Belarus posted a modest amount of growth.
Given the massive growth in demand for transport equipment in Eastern Europe and the lack of exposure of these countries’ banks to toxic assets (a.k.a. US subprime mortgages), there was some hope in early 2009 that trailer demand would fall by a relatively minor 20% compared to Western Europe’s more dramatic 40%.
However, the eastern banks were hit by the lack of interbank lending in the same way as those in the west. Many of the eastern banks and the larger eastern companies had borrowed in the West European capital markets. This source of funding dried up overnight. In addition, many institutions now had large foreign currency debts (€ or $). The result: absolutely no finance available for transport equipment.
The outcome has been spectacular: out of fifteen East European countries, five are forecast to have drops in trailer demand of between 80% and 90%. The average for the region will be a drop of 63%. The Baltic States are amongst the worst hit – in addition to the problems of finance, they, like Ireland and Spain, have seen the crash of a speculative property boom.
Another factor affecting these markets is that they have grown so fast, that in many cases, their trailer fleets are already approaching the size that will fully meet their transport requirements. When that happens, the high levels of trailer demand we have seen up until ‘07/’08 will be but a fond memory.
In 2009, every market in Eastern Europe will experience a fall in trailer demand and trailer production, the later falling by 60%. The collapse in demand for new trailers in the east resulted in one of the top three western manufacturers being forced into liquidation, as demand for imported new trailers vanished. Demand for used imports and locally made trailers has held up slightly better thanks to their lower cost.
The report includes both historical data and a five year forecast of trailer registrations, production, parc (fleet size) and trailer body type for each country.