April Class 8 Sales Rise 15%

This story appears in the May 18 print edition of Transport Topics.

Heavy-duty truck sales climbed 15% in April from a year earlier and surpassed the 20,000 mark for the fifth time in eight months after reaching that level only one other time since 2006, according to WardsAuto.com.

U.S. retail sales of Class 8 trucks increased to 20,509 last month, a jump from 17,776 in April 2014 but a 0.6% downtick from 20,625 in March.

April’s growth was not as strong as the respective 23%, 28% and 25% gains posted in January through March, but still marked the 20th consecutive month of year-over-year improvement in sales volumes.

The continued growth is “a function of broader economic recovery and a relatively strong environment for trucking demand,” said Lawrence De Maria, an industry analyst at William Blair & Co.

Magnus Koeck, vice president of marketing and brand management for Volvo Trucks, also said favorable economic conditions continue to support Class 8 sales.

“After a slower-than-expected first quarter, [gross domestic product] will grow over the coming quarters, solidly underpinned by the strong labor market, gradually higher wage growth, low gasoline prices and a continued recovery in the housing market,” Koeck said.

The ongoing strong demand for new equipment reflects both replacement purchases and expansion of the Class 8 population, he said.

Many fleets are investing in new models to take advantage of their greater fuel efficiency, said Dennis LeGrand, corporate new truck sales manager for Truck Country, a Freightliner dealer with 20 locations in Iowa, Wisconsin, Indiana and Ohio.

“We’re actually having customers trading way newer trucks than they have in the past several years because they’re looking for these fuel-economy gains,” he said. “There’s enough of a gain there that they’re willing to finance some new, more expensive equipment.”

LeGrand also said automated manual transmissions are in high demand because they can enable inexperienced drivers to achieve better fuel-economy results.

“The automated transmission has hit at the right time because it’s harder to get good, experienced drivers,” he said.

As a result, demand for new trucks has been exceeding manufacturing capacity, LeGrand said, with 2015 build slots for certain truck configurations already full. The dealership has been trying to “wiggle some spot availability,” but even that is difficult now.

“Our fleets continue to call us up, asking if we can get more slots yet,” he said. “It’s a problem, but a good problem.”

Although Class 8 sales continue to increase, incoming orders for future production declined from year-ago levels in both March and April.

Analysts have attributed the slowdown in order activity to manufacturers’ extended backlogs and a dwindling number of remaining 2015 build slots rather than a weakening in demand.

“By and large, many trucking fleets have placed their orders for this year and now, for certain models, they have to wait for next year, so there’s some patience being exhibited,” De Maria said.

He also noted that order patterns typically decline heading into the “doldrums of summer.”

Among the North American heavy-duty truck manufacturers, Peterbilt Motors Co. posted the largest year-over-year gain in April, with sales jumping 36% to 2,981 units, representing 14.5% of the total market.

Kenworth Truck Co. sold 3,417 trucks last month, a 31% climb from a year ago. The brand captured 16.7% of market share.

Sales at Volvo Trucks climbed 19% from a year ago, to 2,712 units, representing a 13.2% market share.

“Strong April sales for Volvo reflect customer interest in our integrated powertrains and fuel-efficient truck models,” Koeck said.

Mack Trucks sold 1,747 trucks, a 7% gain from a year ago and accounting for 8.5% of the market.

“Robust manufacturing output generating high levels of freight continues to be a key driver of Class 8 sales,” said John Walsh, vice president of marketing.

Daimler Trucks North America’s Freightliner brand continued to lead the market with 6,689 heavy trucks sold in April, up 9% from a year earlier and accounting for 32.6% of all sales during the month.

Sales of DTNA’s Western Star brand increased to 376 trucks, from 258 a year ago.

Markus Pfeifer, director of marketing operations and planning at DTNA, said “stable sales and consistent growth have been the overarching theme” of 2015.

“We have found a strong desire from fleets to replace their older vehicles with newer, more fuel-efficient and more driver-friendly vehicles that will add to their bottom line,” he said. “Additionally, a strong desire to attract the top professional talent in the industry has driven demand for our product.”

Navistar sold 2,581 of its International trucks in April, down 3% from a year ago. The brand’s market share was 12.6%.