Class 8 Sales Plummet 27.7% in June; Eighth Decline in Last Nine Months

U.S. retail heavy-duty truck sales contracted for the eighth time in the past nine months year-over-year in June, and the 27.7% plunge was the sharpest decline of the rough stretch dating to October.

Original equipment manufacturers and their dealers sold 18,354 Class 8s during June, down from 25,369 trucks in June 2015. For the first half of this year, sales dropped 15.4% to 104,158 units from 123,188 in 2015, WardsAuto.com said in a July 13 report.

Analysts attributed the poor sales to a generally lackluster economy that has diminished the need for freight-hauling services. Problems with the used-truck market also were mentioned.

“It’s not a pretty picture. Freight remains soft and fleets are asking themselves, ‘When’s it going to pick up?’ ” said Steven Tam, vice president of ACT Research Co.

Prior to the recent declines, truck sales grew year-over-year from September 2013 to September 2015 — a 25-month streak.

John Walsh, Mack global vice president of marketing and brand management, said the sales decline was expected.

“We’ve been anticipating for some time now that the Class 8 retail market this year would not reach 2015 levels, so the results from the first half of 2016 really aren’t surprising,” Walsh said. “Stagnant freight levels, driven by the dampening effect of excess inventories on manufacturing, continue to weigh on sales.”

Tam said ACT expects sales of highway tractors to contract much more forcefully than vocational truck sales, as for-hire fleets allow their capacity to diminish by not buying as many trucks to replace all of the older vehicles they scrap or sell. ACT said tractor sales should fall 25% this year from 2015 levels, whereas vocationals are expected to dip just 2%.

The Columbus, Indiana-based research firm projects sales probably will remain weak through the end of this year and well into 2017, not showing strength until 2018, Tam said.

Another analyst said June’s year-over-year comparable was especially difficult.

“While the June 2016 level of sales was considerably below the 25,000-plus pace of June of 2015, that month ranked third on the list of the strongest months ever. Only December and March of 2006 were higher,” said John Blodgett, vice president of sales with the research firm MacKay & Co.

Also, compared with June 2009, when 8,006 units were sold, the latest figures “confirm the sustained rebound in sales that we have seen since the end of the recession,” Blodgett said.

At the same time, June sales rose 6% compared with May’s 17,312, and June’s total was the second-highest of the year, according to Ward’s.

Yet, all seven OEMs posted sales declines for the month, and six of them were down for the first half, with only Western Star Trucks, the smallest brand, posting a gain.

Navistar Inc., the manufacturer of International Trucks, suffered the most severe monthly loss, plummeting 53.5% to 1,552 big trucks from 3,339 the previous June.

“The dramatic drop we’ve seen in used-truck pricing across the industry has forced fleets to keep their trucks longer, and while we are seeing pockets of growth in medium-duty and severe service, over-the-road trucks have seen the most drop-off, due to the values of the used market,” said Jeff Sass, Navistar senior vice president for sales.

Freightliner Trucks, a division of Daimler Trucks North America, sold 6,725 big trucks for the month, a 28.4% drop from the 9,386 in June 2015. Kenworth Truck Co. a unit of Paccar Inc., came in second for the month, selling 2,741 Class 8s, a 26.7% falloff from 3,737 a year ago. Volvo Trucks North America, a part of Volvo Group, had a 24.8% decline to 2,465 heavy trucks from 3,276.

Magnus Koeck, VTNA vice president of marketing, said this year confirms 2015 was the peak cycle, citing “unusually high inventory levels in all sectors of the economy, which is decreasing manufacturing activity and freight volume in longhaul, a key market segment for Volvo. … Despite these factors, we are still anticipating a solid overall Class 8 heavy-duty truck market in 2016.”

Peterbilt Motors Co., also part of Paccar, was fourth for the month, selling 2,333 big trucks, down 20.5% from 2,935 the previous June.

Mack Trucks, another Volvo Group subsidiary, had the slimmest monthly decline, 4.2%, to 2,055 from 2,145.

Other truck manufacturers declined or did not respond to requests for comment.

DTNA’s Western Star sold 453 Class 8s, down 15.5% from 536 in June 2015. It saw year-to-date sales rise 9.7% to 2,598 units.