The on-highway original equipment market outlook calls for continued softness, according to Stu MacKay, president of MacKay & Co. He was presenting data from a supplier barometer while speaking at Heavy Duty Aftermarket Dialogue in Las Vegas. These suppliers expect the market to be softer by 8% to 10%. MacKay says the market “still has a hangover from the boom of 2015.”
MacKay and Co., also tracks Class 8 utilization rates and explains that utilization is driven by changes in the economy. Utilization rates are lower than they were a decade ago due in part to Hours of Service rules. MacKay noted that lower utilization rates also pull down aftermarket activity. Trucks that are not racking up miles or hours will wear more slowly and therefore will need less maintenance, parts, and repair
The off-highway OE outlook also causes for softening in the 4% to 5% range. The one bright spot is the aftermarket which is expected to be up 4% to 5% in 2017 over 2016.
Looking at the number of units in operation for Class 8 vehicles, MacKay says the market is flat at 3 million because of some modest gains in recent years, putting it back to an "operating universe" at 2005 and 2006 levels of activity.
The trailer operating universe is stable and, according to MacKay, “we are about where we were a decade ago. One big area of growth has been the container chassis market which is up 2.5 times since the early 1990s due to the growth in intermodal. Trailer utilization mirrors that of trucks and is in the low- to mid-80% range."
About NewStream Enterprises (NSE) | NSE, a subsidiary of SRC Holdings Corporation, was formed in 1990 to provide customized supply chain management, such as kitting, packaging, light assembly, warehousing, distribution, and fulfillment, to the world’s leading On and Off Highway original equipment manufacturers (OEMs). It is an employee owned company which truly believes in the power of a workforce when each has a stake in outcome. NSE can manage all or any segment of your supply chain process. Our services are customized to fit your requirements. From materials management, to direct order fulfillment, NSE becomes a seamless extension of your business. Learn more at NewStreaming.com