UK sales of new trucks over six tonnes will sink to an all-time low of 28,000 or fewer in 2009 and are unlikely to recover in 2010, according to Daf Trucks' recently appointed MD Ray Ashworth.
Even by 2011, Daf does not expect the UK market to exceed 40,000 vehicles, well below the 50,000 average generated in normal economic conditions.
The company fears cuts in public spending and tax hikes next year could prolong and deepen the recession into 2011.
"The normal rules no
longer apply," Ashworth tells MT. "We have had to re-evaluate everything."
Daf has responded to the downturn by reducing working hours and extending holidays rather than laying off production staff, so it will be ready for the upturn in demand when it eventually arrives. But Ashworth warns that the strong Euro and a shortage of late model used trucks could mean prices start to rise steeply next year.
"At the moment, we are selling the stock of chassis built to satisfy orders placed in the boom and subsequently cancelled, but once they are gone, the new vehicles we will build using components imported from Europe will be more expensive," he says. "Used prices will also rise because so few vehicles have been put into the market this year."
Daf still makes or sources most major components including cabs, engines and axles, in Europe rather than cheaper Far Eastern markets, with minor components bought locally.
While truck demand in Spain and Ireland has collapsed
even faster than in the UK, the economies of France and Germany are leading the recovery in Europe, so truck sales there will get back on track faster.
Reed Business Information Limited.©2009
