Class 8 Sales Rise in September, But Orders Drop Dramatically

By Jonathan S. Reiskin, Associate News Editor

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

Heavy-duty truck sales in the United States grew for the fourth straight month in September, but year-to-date results remained weak and the recent national economic chaos led to a sharp drop in new orders during September.

Original equipment manufacturers and their dealers sold 10,891 heavy-duty trucks last month, up 12.5% from an anemic 9,677 units in September 2007, according to WardsAuto.com. The sales total for the first nine months was 98,055, down 16.1% from the comparable period last year, Ward’s said.

Meanwhile, the outlook for truck building turned bleaker. ACT Research Co. said Oct. 16 that preliminary results from its monthly survey showed North American Class 8 orders fell sharply and suddenly.

“There was a sharp pullback in September to a 12- or 13-month low,” said Kenny Vieth, partner and analyst at ACT. “Even after seasonal adjustment, it was the worst performance this year. Credit evaporated,” he said.

Vieth said new heavy-duty orders averaged about 16,700 a month from February through August, with August topping 17,000. But in his initial tally for September, new orders were about 10,800, a drop of 36.5% from August, he said.

TEC Equipment, a West Coast Volvo and Mack dealer, said new-truck sales for the 12 months ending Sept. 30 were down 57% from the previous 12 months. Used-truck sales were off 35%.

David Thompson, TEC’s chief executive officer, said there is usually a see-saw relationship between new and used truck sales, with one being up when the other is down, “but not now.”

Thompson said that his parts sales and service lines are doing well because customers hanging onto trucks longer. He also said customers are shopping but not buying.

“A lot of smoke, but no fire,” Thompson said.

“There’s quoting activity, but no final decisions. I think there’s a lot of pent-up demand,” said Jack Saum Jr., president of the Beltway Cos. in Baltimore, an International Trucks dealership.

“We recently filled a large, long-standing order for fourth-quarter delivery, but the buyer did push part of it back to the first quarter of next year. With all of the news about the stock market, we’re not seeing a lot of new orders,” Saum said.

The 12.5% average sales gain that Ward’s reported Oct. 10 covered a wide range of results. Three OEMs posted significant gains, while two broke even, and three manufacturers had substantial volume losses.

Freightliner Trucks had the largest market share for the month and the strongest year-over-year increase. Freightliner, a subsidiary of Daimler Trucks North America, sold 2,781 new Class 8s, up 51.6% from the 1,835 units moved in September 2007. However, its nine-month volume was down 18.1% from the same time last year, and last week the parent company announced a sharp cutback in production capacity (see story, p. 1; click here for Premium Content story).

Navistar Inc. and its International brand came in second for September, selling 2,617 heavy-duty trucks in the United States, a 28.9% increase over a year earlier. With a 4.4% increase so far this year, Navistar is the only OEM to post a nine-month volume gain.

Peterbilt Motors also enjoyed a major monthly gain, taking third place by selling 1,525 units during September, an 11.8% increase from the previous September. However, its cumulative heavy-duty volume declined by 17.5%.

Kenworth Trucks, like Peterbilt a part of Paccar Inc., finished fourth for the month, selling 1,305 big trucks, a slight slip from 1,309 units moved a year ago. Its cumulative volume was 19.5% below the pace for last year.

Mack Trucks sold 1,006 heavy trucks, up slightly from 1,000 in September 2007. Its nine-month sales were down by 12.9%.

Volvo Trucks North America, Mack’s sister company, had the largest monthly percentage drop of any OEM. It sold 850 big trucks in September, 29.1% less than the 1,199 it sold a year earlier. Volvo’s cumulative volume was down by 15.1% from the first nine months of 2007.

Sterling and Western Star Trucks, DTNA’s two smaller brands, also had volume losses for the month.

Sterling sold 666 heavy trucks for the month, a 10.4% decrease from the 743 it sold in September 2007. Its nine-month market share declined to 6% this year from 8.4% a year ago.

Sterling’s nine-month volume was down 40.3% from a year earlier.

Western Star, the smallest of the eight OEMs, sold 139 trucks in September, an 11.5% decline from the 157 units sold a year earlier. Its cumulative volume was down by 50.9% from last year.