Class 8 Orders Tumble 39% in April
Class 8 truck orders tumbled 39% year-over-year in April, reaching a seven-year low for the month, in the midst of a weak freight environment, slumping used-truck prices and overstocked dealer lots, two consulting firms reported.
ACT Research gauged orders at 13,700, while FTR said the preliminary total was 13,500 units. The month-to-month decline was 16%.
“Activity is expected to remain soft during the traditional summer slow order season,” the statement from FTR said, noting an annual order pace of 190,000 over the past three months and an annualized rate of 237,000 Class 8 trucks over the past 12 months.
“Class 8 orders were once again below expectations with the downshift in order activity continuing,” Don Ake, vice president of commercial vehicles at FTR, said in a statement. “This order volume is surprisingly low. Fleets have right-sized for the current freight volumes and do not need additional units. They are being very cautious to not overextend, until business improves some. Inventories remain bloated.
The OEMs will not be able to maintain current build rates under these order conditions. It appears more production cuts are on the way. Backlogs are quickly shrinking and are expected to fall below 2014 levels relatively soon.”
ACT President Kenny Vieth attributed the Class 8 drop to “an ongoing overcapacity narrative, a resulting weak freight rate environment, softness in late-model used-truck values and excessive new vehicle stocks.”
Medium-duty orders totaled 20,100, ACT reported, 12% higher than the April 2015 total and 10% sequentially.
Vieth said medium-duty orders that have been solid since September are tied to “a decent jobs market and rising incomes, which support discretionary spending and improved housing and automotive sales activity.”
