NA truck market booming. North Canadian? Not so much

TORONTO — OEMs are building lots more trucks these days and experts predict demand will be outstripping supply by a healthy margin in the next few months. Only problem is, they’re sure not building them in Canada the way they used to.

According to something called the “Global Auto Report” released this week by Scotia Economics, all signs in the truck-building market point to double-digit growth next year.

Between them, Daimler, Paccar and Navistar, the three largest truck manufacturers, expect to produce about 300,000 rigs in North America this year up from only 202,000 in 2010.

And even though Paccar’s ramping up production in its Ste-Therese, Quebec plant to more than 600 trucks per month, up from an average of 470 trucks last year, overall, Canada’s truck production has shrunk from about from 74,000 units in 2006, to only 5,600 vehicles in 2010.

A series of truck plant closures in the last decade has obviously had an effect.

Canada accounts for about two percent of North American heavy-truck builds now, down from 10 percent as recently as 2008.

There’s still no word from Navistar on whether it’s going to re-open its Chatham, Ont., plant. There have been mixed signals from the Illinois-based OEM.

According to the economists who produced the report, most of the truck growth is due to replacement-cycle purchases and the replenishment of the fleet that was shrunk so dramatically during the 2007-09 downturn.

"The sharp increase in heavy-truck assemblies reflects a rush of new orders placed by fleet owners attempting to respond to rising freight demand by upgrading and increasing the size of their vehicle fleet," stated Carlos Gomes, Senior Economist and Auto Industry Specialist, Scotia Economics.

"This represents a sharp reversal from recent years,” he said, “when the trucking industry underwent a sharp downturn with more than 6,000 trucking companies — mainly smaller carriers — going bankrupt during the 2007-2009 global economic downturn. The industry’s rationalization is estimated to have reduced North American trucking capacity by roughly 13 percent," Gomes said.

However, even if truck makers are not assembling trucks in Canada, at least one Canadian industry is benefiting from the boom.

"A key beneficiary of the revival in heavy truck demand is tire production," concluded Mr. Gomes.

"In particular, a major tire manufacturer operates three plants in Nova Scotia, including producing commercial truck tires in Waterville. The company recently added 75 new technical and manufacturing employees, as well as a new building and new equipment to support production of a popular tire at the facility."