Class 8 Sales Decline Again

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

U.S. heavy-duty truck sales declined 6.8% in January from a year earlier to 13,158 units, the lowest monthly total since July 2011, WardsAuto.com said Feb. 12.

It was the fifth straight month that manufacturers and dealers reported a year-over-year decline in Class 8 retail sales. Prior to the contraction that started in September, sales expanded on a year-over-year basis for 32 consecutive months.

The last time monthly sales dipped below 14,000 was July 2011, when the total was 12,885.

Results were not consistent by brand, with three nameplates posting volume gains of more than 25%, and four brands shrinking by at least 20%. And truck dealers and manufacturers said they were uncertain as to how the year will unwind.

“I heard, ‘I did OK,’ and ‘It was average,’ and ‘Not as good as I had hoped,’ but nobody at the convention said 2012 was great,” Richard Witcher, chairman of American Truck Dealers, said about dealer outlook the week after the group’s recent annual meeting.

Witcher said this year’s business level would probably be similar to last year’s total of 194,715, but there is no consensus on what happens next.

Troy Clarke, Navistar International Corp.’s chief operating officer, told the dealers the current level of business could turn out to be typical, not weak, and that they should adjust to it. In contrast, American Trucking Associations Chief Economist Bob Costello told the conference he thinks the economy will accelerate sharply in 2014 and 2015, driving truck sales higher.

FedEx Freight, the less-than-truckload division of FedEx Corp., is buying trucks, mainly replacement vehicles but also for limited expansion, President William Logue said in a Feb. 12 interview with Transport Topics.

“Over the last couple of years, since we’ve come back to profitability, we’re investing in our fleet and will continue to invest,” said Logue, whose company is North America’s largest LTL carrier.

“Our fleet’s pretty healthy. We’re buying tractors and pup trailers.”

Rush Enterprises, the largest publicly traded truck dealer, said while annual revenue and net income increased in 2012 from 2011, the fourth quarter saw declines from a year earlier. The company sells Peterbilts and Internationals on the heavy-duty side.

“We expect that the stronger order intake experienced during the past several months and customer acceptance of Navistar’s engine strategy will begin to drive increased new-truck deliveries beginning in the second quarter. We believe this improvement should continue throughout 2013 and into 2014,” CEO W.M. “Rusty” Rush said in a statement. Rush said he expects Class 8 U.S. retail sales of 198,000 to 208,000 this year.

Ward’s said that among the individual brands in January, Freightliner Trucks kept first place in market share, selling 5,868 Class 8s, a 29.3% increase over the 4,540 sold at the start of 2012.

“Daimler Trucks North America had an outstanding month for market share. January results highlight that, in spite of economic uncertainty and lower overall industry order intake, customers are willing to invest,” said David Hames, a DTNA general manager. He cited the Freightliner Cascadia and the Western Star 4700 as DTNA vehicles that are selling well.

Navistar’s International brand sold 1,959 big trucks, a 42% fall from the 3,376 units it moved the previous January.

“We have been seeing some choppiness in industry orders the last couple months, but our forecasts point to an overall lower first half and an increasing industry in the second half of 2013,” Navistar spokeswoman Elissa Koc said.

Issues with Navistar’s engine emissions technology have cut into its sales; new models are now heading into production.

The two operating companies of Paccar Inc. — Peterbilt Motors and Kenworth Trucks — took third and fourth place, respectively, but also saw large year-over-year declines.

Peterbilt sold 1,580 big trucks for the month, down 22.1% from 2,028 a year ago. Kenworth sold 1,534 Class 8s, a 23.2% decline from 1,998 the previous January.

Volvo Trucks posted a large gain off a small base to claim the fifth spot for the month. The company moved 1,037 heavy trucks, a 36.4% jump from the 760 a year earlier.

Volvo dealer Ron Remp attributed the gain, in part, to the reception of Volvo’s XE package, combining the company’s in-house 13-liter engine and transmission with axles engineered to low ratios.

While Remp was pleased with Volvo’s improvement, he said he wasn’t sure how durable the expansion would be because of general worries among truck buyers.

“There is still some apprehension and leftover concern about what’s going on inside the [Washington] Beltway. There are still customers who are sitting on the sideline after the ‘fiscal cliff’ and other budget issues. I don’t think we’re out of the woods yet,” he said in assessing truck buyers’ confidence.

Mack Trucks, also part of Volvo Group, saw its monthly sales fall 28.4% to 860 big trucks from 1,201.

“We’re not surprised by the slow start, given ongoing uncertainty around the domestic and global economies,” said John Walsh, Mack’s marketing vice president. “With signs of life in construction and the age of the existing fleet, we’re hopeful the situation will improve as the year progresses.”

Western Star Trucks, a sister company to Freightliner, had the highest percentage gain for the month, 48.1%, as volume rose to 317 units from 214.

Staff Reporter Seth Clevenger contributed to this story from Orlando, Fla.