August Class 8 Orders Skyrocket 68% But National Fleet Size Remains Low

August orders for new Class 8 trucks jumped 68% this year from a year earlier as dramatic increases  in sales and orders continued. Despite a 31.5% gain in registrations in the second quarter, however, the total fleet size remained below previous years.

ACT Research Co. reported Sept. 6 that truckers ordered 20,800 new Class 8 vehicles in North America in August, compared with 12,376 in August last year; in July, fleets ordered 18,726 trucks.

Meanwhile, R.L. Polk & Co.’s latest report on truck registrations showed that the U.S. Class 8 fleet grew just 1% in the second quarter to 3.552 million vehicles, compared with the first quarter of 2011, but was still down from the three previous years.

“New Class 8 registrations started off slow this year, but the increase in Class 8s during the second quarter is incredibly positive, because companies made the orders and then followed through with taking delivery and registering them,” said Gary Meteer, Polk’s senior account executive.

Registrations of new Class 8s totaled 37,268 in the second quarter, up from 28,336 in the second quarter of 2010, Polk said.

Analysts agreed that American fleets were still recovering from the severe downsizing they went through during the recession. They said that orders for new trucks show that fleets have started a replacement phase.

“We have seen a lot of economic gymnastics in the past six weeks, which are not subsiding,” Steve Tam, ACT vice president of the commercial vehicle sector, told Transport Topics. “This means that so much of the demand we’re seeing in 2011 has been for replacement of old tracks, rather than what is happening in economy. And as long as the economy doesn’t collapse, truckers have the money and very strong need to continue this replacement.”

Truck manufacturers have re-ceived 202,747 new Class 8 orders in North America to date this year, 116% over the number of orders they received through August 2010, ACT said.

“Most fleets reduced the number of trucks they operate during the recession, and they learned how to implement higher utilization of the equipment they had left, so they don’t need to expand their fleets yet,” Chris Brady, president of Commercial Motor Vehicle Consulting, Manhasset, N.Y., told TT.

Meteer said that he expected the current monthly new Class 8 registration rate of 10,000 to 12,000 will continue for some time, despite much higher order numbers in recent months. Orders can be spread out for delivery over many months.

“From our perspective, we don’t see the market in the near term of the next three years getting back to the heyday of 2006 . . . of most months over 20,000 new registrations,” Meteer told TT.

New Class 8 registrations have increased each month of 2011 through June, he said, “and that’s very good, but I wouldn’t go so far as to say that the recovery will go higher.”

“If you take ’06 out of market and the first four months of ’07, 10,000 to 12,000 units per month looks like a fairly consistent market,” Meteer said. “New Class 8 registrations have moved otherwise in a fairly tight range over time of 10,000 to 12,000 a month, and we’re now back in that range.”

Through July, U.S. customers bought 84,953 Class 8 vehicles in 2011, a 34.4% increase from the first seven months of 2010, according to WardsAuto.com.

“Another good sign from the data was that both big fleets, those with 500 and more trucks, have come back to buying, as well as the little guy, who has one, two, three or four trucks,” Meteer said.

Polk said that small fleets of one-to-five trucks increased their registrations of new vehicles in the first six months, making up 33.3% of all commercial vehicles on the road.

Large fleets of more than 500 vehicles increased their registrations of new and used trucks by 14% in the first half of this year, compared with 2010, Polk added.

In Class 8s, Navistar Inc.’s International brand was the only one with fewer new registrations in the first six months of this year than in the first half of 2010, dropping 20.2%.

Volvo Trucks North America grew the most, by 106.4%, followed by Kenworth Truck Co. at 41.9%, Freightliner at 38.3%, Mack Trucks Inc. at 35.2%, and Peterbilt Motors at 27.6%.

“We anticipated, and are seeing, increased momentum in the second half of the year as customers gain experience with our MaxxForce big-bore engines,” Jack Allen, president of Navistar’s North American truck operations, told TT.

“We expect registrations to continue to outpace 2010; however, the volume gap will shrink, given the start of the sales uptick in late 2010,” David Hames, DTNA’s general manager. marketing and strategy, told TT.