European truck makers are pessimistic toward 2009 market

European truck makers gave a cautious outlook for 2009, worried that a six-year boom could peter out as the global economy slows.

"Things won't be any easier for our commercial vehicle business in 2009," Daimler Trucks chief Andreas Renschler told reporters on Tuesday at the IAA, Europe's biggest truck show.

Daimler, the world's biggest maker of trucks and buses, expects the global commercial vehicles market to stagnate or at best rise slightly next year, he said.

Its truck sales were practically flat in the first eight months of this year and new orders rose only 3 percent, but Renschler nonetheless expected a slight increase in 2008 truck sales due to rising demand for transport in emerging markets.

Demand sagged in particular in the North American market, where Daimler absorbed an 18 percent truck sales drop through August as the market contracted amid a cooling economy.

"There was no second-half recovery as economists expected, and the forecasts for the commercial vehicle market have been lowered month by month," Daimler said in a statement.

Renschler said the U.S. truck cycle had hit bottom but Japan lacked growth momentum, and the group was braced for a slowdown in Europe after two exceptionally strong years. However, emerging markets like Brazil and India seemed set for more growth.

Daimler was placing its hopes on prospects that customers would invest heavily to make their fleets more efficient at a time of high energy prices.

"What is new is the urgency to move ahead with these efforts," he said. "Zero-emission trucks and buses could be the norm by 2020."

Volkswagen was a bit more optimistic after reporting a 9.3 percent rise in commercial vehicle sales to 343,100 units in the first eight months of 2008.

While growth in its core market of western Europe was just 3.2 percent, it recorded a near 30 percent sales rise in eastern Europe. South America reported 25 percent growth.

"Despite more difficult economic conditions in some European markets, we are currently confident we can reach our target to deliver a total of more than 500,000 vehicles," VW Commercial Vehicles head Stephan Schaller said at the truck show.

He told Reuters he aimed to boost 2009 sales but added it was difficult to make a specific forecast.
General Motors' German Opel brand was counting on a broader model line-up to help buck the weak trend and boost sales to 185,000 units next year, division head Thomas Bauch said.

Its commercial vehicles sales were flat at nearly 115,000 units in the first eight months of this year. It aims to hit 177,500 in the full year.

Even if unit sales stay flat, makers of commercial vehicles and their suppliers are struggling to shore up profits.

"We will have trouble reaching last year's earnings," said Hans-Georg Haerter, chief executive of ZF Friedrichshafen, which specialises in drivetrains and chassis. "Rising prices for commodities and oil are making life difficult."

These factors will cost ZF hundreds of millions of euros this year, he said.

Truck sales are often seen as a leading economic indicator because booming economies produce more goods which need to be transported. But as demand slows, sales seem set to ease once full order books are cleared.

"The next two years are going to be difficult," said market research group CAR, based in Gelsenkirchen, Germany.

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