April Class 8 Truck Orders Increase Year-Over-Year
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North American Class 8 truck orders increased year-over-year but fell from the previous month during April, according to ACT Research.
ACT preliminary data showed orders increased 34% to 15,600 units from 11,600 during the same time in 2023, and went down 9.8% from the 17,300 units reported the previous month. Every month this year has seen a year-over-year increase except March.
ACT President and Senior Analyst Kenny Vieth said that a market entering the historically worst time of the year for orders — at the bottom of the profitability cycle for on-highway tractor buyers — is producing results in line with expectations.
“Even in good years, Q2 typically delivers below-trend orders, while Q4 orders can trigger optimism at the bottom of the cycle,” he said. “With the long bottom in freight volumes and rates continuing in the most recent data from DAT amid lingering market overcapacity, carrier profitability as illustrated by the publicly traded for-hire carriers’ financial performance was dismal in Q1.”
Treadway
“It’s definitely slowing down, but I’d be cautious about comparing year-over-year numbers because last year was a completely different situation,” added Kenworth Sales Co. President Kyle Treadway. “Order intake was dictated by the manufacturers, not the market.”
Treadway noted that the current market is defined by a lack of confidence among carriers to drive orders. However, he points out that this isn’t true across the board; certain markets, such as commercial construction or agriculture, are on different market cycles and therefore at a different confidence level. The same is true for private fleets, he said.
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“We’re seeing more growth in private fleets than in the for-hire,” Treadway said. “It’s a new trend. From what I hear, it’s that the shippers want to take more control over the rates, over the timeliness, over the capacity.”
FTR Transportation Intelligence issued a report that said Class 8 preliminary net orders for April came in at 14,000 units, down 28% from March but up 12.5% year-over-year. The report also noted that the results were consistent with the recent demand trends and are in line with seasonal expectations.
Moyer
“Despite the month-over-month decline, the fact that orders were up significantly from the April 2023 level indicates that the market is still solid,” said Dan Moyer, senior analyst for commercial vehicles at FTR. “The persistent stagnation in the freight markets has not deterred fleets from being willing to order new equipment. Order levels were below the historical average but remain in line with seasonal trends.”
FTR indicated in the report that Q1 levels mostly quelled concerns of a rapid decline in demand and that the market is performing slightly above replacement-level orders. It also noted orders have continued to slow at a seasonally typical rate. This has put the total at 267,700 units for the past 12 months.
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“The U.S. and Canadian industry orders were about 25% higher in April this year versus April 2023,” said Magnus Koeck, vice president of strategy, marketing and brand management for Volvo Trucks North America. “The U.S. orders came in even higher, while the Canadian orders we down roughly 10%. If we’re going to see the total U.S. and Canadian retail market hit the [270,000] mark projected this year, the orders need to be stronger going forward.”
“Low freight rates continue to influence demand for heavy-duty tractors, and month-over-month orders have slightly softened compared with last year,” said Jonathan Randall, president of Mack Trucks North America. “That being said, vocational sales have remained resilient due to strong consumer spending and a robust construction market.”
Koeck noted the April results marked the lowest order numbers since April 2023, an indication the industry is in the middle of an anticipated downturn. But he also expressed confidence there will be an uptick in the back end of this year and suspects there could be a short-term uptick with truck manufacturers opening their order books in the second half.
