Commercial Vehicle & Transportation

Forecasting Terms & Definitions

What is commercial vehicle forecasting?

Forecasting, or a commercial vehicle forecast, is the predicting or estimating of the commercial vehicle (Classes 5-8 Trucks) over the next one to five years. Forecasting is a blend of national economic analysis (including trade, regulations, and the political environment) and industry-specific analysis. The objective of a forecast is to benefit the manufacturers, suppliers, and investment institutions of the commercial vehicle market to better plan for the next one to five years. Forecasts are often utilized for budgeting and sales projections, allowing organizations to plan for potential changes or challenges in the market.

What are market indicators used in commercial vehicle forecasting?

Market and business indicators used in commercial vehicle forecasting include new and net orders, cancellations, backlog, build, inventory, factory shipments, and retail sales.

How is a new order defined?

New orders are the total number of orders received by the industry each month. Also referred to as gross orders.

How is a cancellation defined?

Cancellations are units that have been ordered previously and are then cancelled. Order and cancellation cannot occur in the same month.

How is a net order defined?

A net order is the total number of new orders minus the cancellations. New Orders – Cancellations = Net Orders.

What is a backlog?

The backlog is the number of vehicles that have been ordered but have not yet been built. Backlog is calculable: Past backlog + current net orders – current build = new backlog.

How is build defined?

Build, or production, pertains to the number of vehicles produced for a given market, NOT the country in which the actual production takes place. When a unit leaves the assembly line it is counted in the build data.

How is inventory defined?

Inventory is the number of units that have been built, but for which no retail sale has yet taken place. Inventory is a calculable number, rather than an additive, number: Past inventory + current build – current retail sales = current inventory.

What is a factory shipment?

Units that have been built and have left the factory. Factory shipment data is read as “built-in” a country.

What is a retail sale?

Retail sales are the number of units sold to end-users.

What is the difference between factory shipments and retail sales?

Factory shipments vs. retail sales: For the trucking industry, ACT tracks monthly and annual retail sales data. These numbers differ from factory shipments. Total OEM build is not equal to or the same as factory shipments (as reported by Wards). A factory shipment takes place when the truck leaves the factory. A retail sale takes place when the truck is actually sold. The timing of a vehicle’s build, its subsequent shipment from the producing factory, and the final retail sales are three different events that do not occur on the same day.

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