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As Medium and Heavy Commercial Vehicle (MHCV) manufacturers in
Europe continue to face deteriorating conditions, following our
August 2021 forecast release, the contours of a revised automotive
industry outlook are emerging. The proximate trigger for the latest
shifts is the summer's spate of semiconductor chip manufacturers in
Malaysia shutting down plant operations in Malaysia due to
COVID-19.
In recent weeks, several European OEMs moved from managing
production lines within the constraints of car chip availability to
having to stop production lines altogether as the supply dried up.
Up to 40,000 trucks—above 6 ton gross vehicle weight
(GVW)—will not be produced in the third and fourth quarter in
Europe as a result.
Based on our calculations, we predict that production is not
likely to be made up in 2022 either. Current expectations are that
semiconductor shortages will continue at least through the first
half of 2022.
Impact of automotive semiconductor shortage worsened by
pandemic surge in Malaysia
The
impact of car chip shortage on the global MHCV industry remained
muted early in the year but grew heading into the summer
months. In the first quarter of 2021, Europe's OEMs saw and felt
the constraints, but only Volvo had to close its plant in Ghent,
Belgium, for a week in February. The second quarter also saw the
Volvo Group with its brands Volvo Trucks and Renault Trucks being
the main ones affected as it had to close for 4 out of 12
weeks.
Furthermore, Ford Otosan in Turkey moved its vacation period
from summer to 30 May to 13 June. Other OEMs like DAF and MAN
produced unfinished trucks that were parked off-site till the
arrival of the missing parts.
With the return from summer vacation, it was expected that the
situation would improve. Instead, it deteriorated, as the car chip
shortage became more pronounced with the halt of semiconductor
production in Malaysia.
Most visible was Scania, which had to stop production for 1-2
weeks right after returning from plant holidays, after having taken
an extra week of plant vacation to begin with.
CEO Christian Levin mentioned in a TV interview that daily
losses represented some 500 trucks. Also, MAN and Mercedes-Benz
informed their suppliers that they had to stop production. For its
part, MAN production in Austria was expected to run only at 50% for
the last three weeks of September. MAN Germany was also running at
a lower level.
At the Mercedes-Benz plant in Wörth, Germany, several major
product lines were stopped, while Unimog continued. Finally, Volvo
also had to shut down another week in the current quarter, even
though availability of semiconductors for them improved compared to
the second quarter.
MHCV production is expected to recover in 2023-24
Despite the high order books and the high demand, IHS Markit
expects MHCV sales to slow as inventories are low and production
stops occur. Traton CEO Matthias Gründler confirmed that a relative
decline in sales for their brands MAN and Scania was already
visible from the end of August and would continue for the rest of
the year.
Our assumptions for the next forecast update have shifted. For
the last quarter of 2021, we now expect the situation to remain
difficult for most of the OEMs. In particular, the introduction of
planned additional shifts and increasing line rates will not
materialize.
MHCV OEMs will have to manage with stop days and potentially
longer Christmas holidays in December, as the visibility on
semiconductor chip availability is very short.
As semiconductors have a long lead time, from order to delivery,
we will also downgrade the first half of the year of 2022 in our
next forecast compared to the previous outlook. To make up for the
lost volumes in 2021 and 2022, we forecast that MHCV production in
Europe will see faster acceleration in the following years, 2023
and 2024.
Even so, not every manufacturer faces the challenge to the same
degree. Based on recent production actuals, there are also two
major OEMs that have not suffered from the shortages: Iveco and
Kamaz, both of which have been ramping up their production during
the year.
Also, the bus segment seems unaffected, as it is still
experiencing low demand due to the late roll-out of vaccination
programs across Europe.
Posted 28 September 2021 by Christiane Stein, Director, Global Heavy Truck Research, S&P Global Mobility
