August Truck Sales Jump

This story appears in the Sept. 20 print edition of Transport Topics.

U.S. Class 8 truck sales climbed 23.5% in August from year-ago levels, pushing sales for the first eight months of 2010 to 16.5% higher than last year’s results for the comparable period, WardsAuto.com reported.

The 8,834 Class 8 trucks sold in August represented a 7.9% drop from July, as high prices for the new units dampened sales, analysts said.

Truck manufacturers have sold 67,680 vehicles so far this year, compared with 58,111 in the comparable 2009 period, Ward’s said Sept. 13.

“The numbers [for August] are not bad and are in line with expectations,” Eric Starks, president of truck consulting firm FTR Associates Inc., Nashville, Ind., told Transport Topics. “It’s a status-quo sales number that suggests that things aren’t slowing down or heating up. We’ll take it.”

“August’s numbers suggest a 2010 annualized sales figure of 107,300, down slightly from July,” Chris Brady, president of Commercial Motor Vehicle Consulting, Manhasset, N.Y., told TT. “Looking at the market, we’re in this real slow, gradual upturn, and it’s going to continue to be real slow.”

He said that large publicly traded fleets were setting the pace for the new truck market.

“The second-quarter profits for most of these companies were pretty decent, but they’re using these profits, after a disastrous 2009, to strengthen their balance sheets by paying down debt and increasing capital reserves,” Brady said. “They’re in no hurry to replace equipment.”

One truck dealer saw clear signs of a recovery, while another said high 2010 prices were holding back fleets that wanted to buy new trucks.

“We’re seeing an uptick in sales and orders, and seeing additional interest from many potential customers,” Ronald Remp, owner of Wheeling Truck Center, a Volvo dealer in Wheeling, W.Va., told TT.

“Customers have surprisingly embraced the new selective catalytic reduction technology, despite its higher price, because they’ve been very, very pleased with the increased fuel mileage,” Remp said.

He said that most fleets in his area ranged in size from 80 to 100 tractors.

“Over-the-road fleets have been doing just as much buying as vocational fleets,” said Remp, Volvo’s board member in the American Truck Dealers association. “The results from SCR have been a pleasant surprise, not only for me but other dealers I’ve spoken to, after all that we went through in 2007.”

Remp referred to the previous introduction of new technology engines to meet U.S. Environmental Protection Agency standards for 2007.

All engine manufacturers except Navistar Inc. adopted SCR to meet EPA’s 2010 standards.

Duane Kyrish, owner of Longhorn International Trucks, Austin, Texas, said high prices were holding back sales.

“Our regular customers all have trucks that are getting on to seven years old, even 10 years, and they know they’re running them too long,” Kyrish told TT. “Yet even at this point, when their business is improving, they are avoiding new trucks, if they possibly can, because of the price. It’s a little overwhelming.”

He said that several traditional customers for new trucks have tried to buy late-model used vehicles to avoid 2010 prices, but other fleets already have bought all such vehicles “in the used truck boom of the past eight months.”

“There are no longer any late-model used trucks available, so that you have to be a little positive about it,” Kyrish said. “At some point, strong new truck activity has to pick up.”

Freightliner Trucks, a division of Daimler Trucks North America, sold the most heavy-duty trucks in August at 2,630 units, but only two trucks more than Navistar’s International brand, Ward’s said.

Freightliner retained its top position for the year as well, with 21,520 new Class 8s sold through August, giving it a 31.8% market share.

Navistar’s International brand was in second place in both sales and market share, with 2,628 Class 8s sold in August and 19,799 sold to date, for a 29.3% share.

Paccar Inc.’s two brands held third and fourth place for both the month and sales to date in 2010. Its Peterbilt Motors Co. sold 957 trucks in August for fourth place, and its 7,547 trucks sold this year to date gave it a 11.2% market share, good for third place.

Paccar’s Kenworth Truck Co. sold 1,060 trucks in August, with 6,819 sold in 2010 to date, a market share of 10.1%.

Volvo Trucks North America sold 810 trucks in the month — 86.2% more than the 435 units it sold a year earlier — and 5,671 to date this year, for a market share of 8.4%.

Mack Trucks Inc. sold 613 trucks in August and 5,134 so far this year, for 7.6% of the market.

DTNA’s Western Star brand sold 126 trucks in August, and 704 this year, for 1% of the market.