In the Marketplace

In a recent forecast, R. L. Polk & Co., a Southfield, MI based automotive information and marketing solutions provider, concluded that while the commercial vehicle market will begin growing again in 2010, volumes will still be significantly below 2005-2007 levels through 2013.

According to Polk, in 2006, commercial vehicle registrations reached their peak volume of 802,100, with 448,200 heavy trucks (GVW 6-8) and 353,900 medium trucks (GVW 3-5). Last year, however, the total commercial vehicle registration volume fell to 485,000. Continued economic difficulties have resulted in a forecasted volume of 380,600 in 2009. As the economy recovers after a projected “bottoming out” of the housing market in July 2009, commercial vehicle sales are expected to trend upward. By 2013, total commercial vehicle registrations are expected to hit 583,900 (approximately 317,000 GVW 3-5 and 267,000 GVW 6-8 vehicles), still well below pre-2008 volumes.

From 2008 to 2009, the total number of commercial vehicles on the road (Vehicles in Operation ' VIO) is expected to increase slightly from 11.8 to 11.9 million, topping the 12 million mark in 2011. The total number of VIO has risen each year since 2004, and this trend is expected to continue through 2013. However, growth in VIO has slowed due to the decrease in new vehicle registrations. One trend is that the percentage of total commercial truck VIO made up of heavy trucks (GVW 6-8) has been on the decline, while the percentage of medium trucks (GVW 3-5) has been increasing. Medium trucks have increased from 38.6% of the total in 2004 to 41.6% in 2008, with a projected increase by 2013 to almost 45% of the total volume of commercial vehicles on the road. In fact, from 2009 to 2013, heavy trucks are expected to grow at a Compounded Annual Growth Rate (“CAGR”) of just 0.3%, compared with a growth rate of 3.1% for medium trucks. The higher growth rate of the broad category of medium trucks (GVW 3-5) over heavy trucks (GVW 6-8) is largely due to the decline in registrations of new GVW 8 trucks and the increase in GVW 3 vehicles. Through 2006, class 8 vehicles were the largest class in the commercial vehicle market. However, government-mandated rules to decrease diesel emissions have led to significant price increases for GVW 8 vehicles, and a decline in new class 8 vehicle registration. Since 2007, class 3 trucks have made up the largest segment of new commercial vehicle registration, a trend that is expected to continue. To view the full report, visit www.polk.com/TL/PV_200907_Issue010_CVMkt.pdf.

Gartner, Inc. of Stamford, CT has forecast that worldwide PC shipments are on pace to reach 274 million units in 2009, which is a 6% decline from 2008 shipments of 292 million. On a more encouraging note, Gartner expects the PC market to post positive growth in the fourth quarter of 2009, setting up a healthy market recovery in 2010 with units forecast to grow 10.3%. Gartner's latest forecast is somewhat brighter than its preliminary forecast from mid-May, which anticipated a 6.6% unit decline in 2009, and considerably stronger than its last detailed forecast from March, which projected a 9.2% unit decline. However, analysts cautioned that while the market appears to be strengthening, it is still premature to say that the worst is over and the market is recovering.

As of press time, the future of CIT Group is looking rather tenuous. Fitch Ratings has downgraded the Long-term Issuer Default Ratings (“IDR”) of CIT and subsidiaries to “BB-” from “BB+.” Concurrent with this action, Fitch has also upgraded CIT's Support Rating to “3″ from “5,” reflecting Fitch's view that there is a moderate probability of support from the U.S. government. In addition, Fitch lowered the Individual Rating to “E” from “D,” which indicates CIT either requires or is likely to require external support. All ratings remain on Rating Watch Negative. In December, CIT became a “bank” for the purpose of qualifying for federal assistance, but since that time the company has lost all three of its investment-grade ratings.

In a recent forecast, R. L. Polk & Co., a Southfield, MI based automotive information and marketing solutions provider, concluded that while the commercial vehicle market will begin growing again in 2010, volumes will still be significantly below 2005-2007 levels through 2013.

According to Polk, in 2006, commercial vehicle registrations reached their peak volume of 802,100, with 448,200 heavy trucks (GVW 6-8) and 353,900 medium trucks (GVW 3-5). Last year, however, the total commercial vehicle registration volume fell to 485,000. Continued economic difficulties have resulted in a forecasted volume of 380,600 in 2009. As the economy recovers after a projected “bottoming out” of the housing market in July 2009, commercial vehicle sales are expected to trend upward. By 2013, total commercial vehicle registrations are expected to hit 583,900 (approximately 317,000 GVW 3-5 and 267,000 GVW 6-8 vehicles), still well below pre-2008 volumes.

From 2008 to 2009, the total number of commercial vehicles on the road (Vehicles in Operation ' VIO) is expected to increase slightly from 11.8 to 11.9 million, topping the 12 million mark in 2011. The total number of VIO has risen each year since 2004, and this trend is expected to continue through 2013. However, growth in VIO has slowed due to the decrease in new vehicle registrations. One trend is that the percentage of total commercial truck VIO made up of heavy trucks (GVW 6-8) has been on the decline, while the percentage of medium trucks (GVW 3-5) has been increasing. Medium trucks have increased from 38.6% of the total in 2004 to 41.6% in 2008, with a projected increase by 2013 to almost 45% of the total volume of commercial vehicles on the road. In fact, from 2009 to 2013, heavy trucks are expected to grow at a Compounded Annual Growth Rate (“CAGR”) of just 0.3%, compared with a growth rate of 3.1% for medium trucks. The higher growth rate of the broad category of medium trucks (GVW 3-5) over heavy trucks (GVW 6-8) is largely due to the decline in registrations of new GVW 8 trucks and the increase in GVW 3 vehicles. Through 2006, class 8 vehicles were the largest class in the commercial vehicle market. However, government-mandated rules to decrease diesel emissions have led to significant price increases for GVW 8 vehicles, and a decline in new class 8 vehicle registration. Since 2007, class 3 trucks have made up the largest segment of new commercial vehicle registration, a trend that is expected to continue. To view the full report, visit www.polk.com/TL/PV_200907_Issue010_CVMkt.pdf.

Gartner, Inc. of Stamford, CT has forecast that worldwide PC shipments are on pace to reach 274 million units in 2009, which is a 6% decline from 2008 shipments of 292 million. On a more encouraging note, Gartner expects the PC market to post positive growth in the fourth quarter of 2009, setting up a healthy market recovery in 2010 with units forecast to grow 10.3%. Gartner's latest forecast is somewhat brighter than its preliminary forecast from mid-May, which anticipated a 6.6% unit decline in 2009, and considerably stronger than its last detailed forecast from March, which projected a 9.2% unit decline. However, analysts cautioned that while the market appears to be strengthening, it is still premature to say that the worst is over and the market is recovering.

As of press time, the future of CIT Group is looking rather tenuous. Fitch Ratings has downgraded the Long-term Issuer Default Ratings (“IDR”) of CIT and subsidiaries to “BB-” from “BB+.” Concurrent with this action, Fitch has also upgraded CIT's Support Rating to “3″ from “5,” reflecting Fitch's view that there is a moderate probability of support from the U.S. government. In addition, Fitch lowered the Individual Rating to “E” from “D,” which indicates CIT either requires or is likely to require external support. All ratings remain on Rating Watch Negative. In December, CIT became a “bank” for the purpose of qualifying for federal assistance, but since that time the company has lost all three of its investment-grade ratings.