Heavy-duty tractors and trailers order-to-build lag more than doubles traditional ranges for backlog-to-build ratios

ACT Research says CV Production in 2021 Is a Question of Supply, Not Demand

According to ACT’s latest release of the North American Commercial Vehicle OUTLOOK, the question of commercial vehicle demand for 2021 has already been answered, but the number of units to be built this year remains a question of supply.

According to Kenny Vieth, ACT’s President and Senior Analyst, “In previous months, we have used 2018 as a corollary for achievable Class 8 output in 2021: From a nearly identical January production rate starting point, the industry managed to build nearly 325k units in 2018.” He added, “Getting to that 2018 volume included the supply chain working through not only transitory ramp-up/synchronization issues, but also labor constraints in the full-employment economy of that time.”

He continued, “From a commercial vehicle demand perspective, orders, from medium-duty trucks to heavy-duty tractors and trailers, remain elevated, with backlogs for tractors and van-type trailers, at current build rates, pushed-out 12 months. That order-to-build lag more than doubles traditional ranges for backlog-to-build ratios.”

Vieth concluded, “In 2021, those early cycle challenges are starting to moderate, only to be replaced by new capacity constraints in this period of synchronized global economic expansion amid an ongoing pandemic. The list of constraints remains long and includes chip and steel shortages, as well as plastic resin production impacted by power failures in Texas, backlogged throughput at ports, and pandemic supply-chain challenges like keeping and growing staff.”

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