Fresh bookings for heavy-duty trucks in North America dropped in September from August following a bleak outlook for the availability of semiconductors.
Bharat Forge and Ramkrishna Forgings, two of the biggest suppliers of rolled, forged and machined parts to such trucks, are expected to get impacted due to the disruption in the supply chain.
Paccar, which makes Kenworth, Peterbilt and DAF Trucks branded trucks, reported deliveries fell by 7,000 trucks in the July-September quarter due to the shortage of semiconductors.
Production of Daimler Trucks, Volvo Trucks, Mack Trucks and Navistar International, the other US truck makers, was equally impacted.
“Paccar anticipates that the semiconductor shortage and associated production inefficiencies will continue in the fourth quarter,” the company said in a statement on October 4. However, demand for trucks remains strong, according to Paccar. This is also evident from high freight rates.
Sales of Class 8 heavy duty trucks in North America dropped 12 percent to 28,100 units in September from a year earlier, according to ACT Research. The decline was a steeper 28 percent from levels in August.
Truck makers have resorted to red-tagging, a process where trucks are assembled and kept in semi-finished form awaiting the final components.
“It is not demand but supply that is dictating new order activity as OEMs are being judicious in fully opening 2022 order books when there is no clear visibility of supply-chain capacity next year,” said Kenny Vieth, president and senior analyst at ACT Research.
The semiconductor supply crunch is not expected to ease in October-December and this would translate to lower production in this quarter as well.
In September, Bharat Forge had announced a backlog of 10 months in North America backed by a $1 trillion stimulus package. The Pune-based company expects Class 8 truck production to be 290,000-300,000 units in 2021, as per a note shared by JM Financial.
(Source: Money Control)
