Class 8 Sales Slip in July

This story appears in the Aug. 19 print edition of Transport Topics.

Class 8 U.S. retail truck sales declined in July for the 11th straight month in comparison with last year, according to WardsAuto.com. However, the drop was the smallest percentage decline of the 11 months.

The July total also dropped from June, and cumulative year-to-date sales for 2013 fell from the previous year.

Some industry participants said they were optimistic about the potential for growth in the second half of the year, but one analyst said the ongoing slide in market activity meant manufacturers would have to reset their production expectations for the year.

W.M. “Rusty” Rush, chairman and CEO of truck dealership chain Rush Enterprises Inc., told Transport Topics that he expects a “slight uptick” in retail sales in the remainder of 2013.

Rush said he’s “not going to get overly bullish on it,” but added that he’s “comfortable” with a full-year U.S. sales projection of about 195,000.

Robert W. Baird & Co. analyst David Leiker said in an Aug. 14 note that the industry’s full-year production expectations are “resetting.”

Early this year, the “consensus” view was for accelerating North American orders to drive production back above an annualized rate of 300,000 units by the end of 2013, but “the lack of order acceleration and tempered freight/pricing environment for truckers has begun resetting this view,” he said.

July sales declined 6.6% to 15,340 from 16,421 in July 2012, and were down 3.7% from June’s total of 15,929, which remains the high mark so far in 2013, Wards’ data showed.

Through July, cumulative 2013 sales are down 12.5% to 101,180 trucks from 115,667 in the first seven months of 2012.

Rush pointed to “solid” quarterly results at some of the large publicly traded carriers as a positive sign for new truck demand.

“If they’re doing better, I think some of your smaller to midsize carriers are probably going to tag along,” he said.

Bill Kozek, president of Navistar’s North American truck and parts business, noted that June, July and August are historically the lowest sales volume months, but he said last month’s total was the second-highest for the month of July since 2006, trailing only 2012.

Other truck makers did not provide comment before Transport Topics’ deadline.

Kyle Treadway, president of Kenworth Sales Co., which operates 20 locations in Idaho, Utah and other Western states, said there are “many layers of issues” that have prevented sales from escalating, despite pent-up demand for replacement of old equipment. He cited driver hours-of-service and other regulations, as well as the challenge of finding and retaining drivers.

“It’s just really difficult to operate today, and a lot of these fleets and truck owners are in uncertain territory, so their caution counsels them not to do anything,” Treadway said.

Dennis LeGrand, corporate new truck sales manager for Truck Country, a Freightliner dealer with 10 locations in Iowa and Wisconsin, said buyers still lack confidence in the economy and their future business prospects.

“If people are going to make a more than $100,000 investment into this new equipment, they’ve got to know that their business is going to be solid so they can afford to pay it off,” he said.

LeGrand said he anticipates second-half sales at his dealership to match last year’s level.

Ward’s said four of the seven North American heavy-duty truck brands posted lower sales in July than a year earlier.

Daimler Trucks North America’s Freightliner brand sold 5,261 Class 8 trucks in July, down 2% from a year earlier but still more than twice as many as any other nameplate. Cumulative 2013 sales have climbed 6.2% to 38,700 units, representing 38.2% market share.

Navistar International Corp., which ranked second in July with 2,402 trucks sold, was down 26.3% from July 2012 but up 5.9% from June. Year-to-date sales have fallen 33.8% to 14,638 for a 14.5% market share.

Navistar’s sales have dropped during its switch to selective catalytic reduction aftertreatment to meet federal emissions standards.

New orders coming in for the company’s new SCR products are split evenly between trucks with the Cummins ISX 15 engine and Navistar’s MaxxForce 13 with SCR, spokeswoman Elissa Maurer said. The company is still taking some orders for trucks with its previous technology — exhaust gas recirculation — as it wraps up its transition to SCR, but SCR orders continue to rise each month, she said.

Navistar recently announced that it plans to cut a few hundred jobs companywide by early September to reduce costs (see story, p. 3).

Paccar Inc.’s Kenworth Trucks sold 2,093 trucks in July, a 3.7% increase from a year ago. For 2013 to date, however, sales have dropped 19.2%, to 13,481.

Peterbilt Motors Co., Paccar’s other North American operating unit, sold 2,067 heavy trucks last month, down 10.5% year-over-year. Year-to-date sales have fallen 17.3% to 13,665.

Sales at Volvo Trucks surged to 2,012 in July, up 36.8% from a year ago. Cumulative 2013 sales, however, have declined 13.2% to 10,766.

Mack Trucks, which is part of the Volvo Group, sold 1,240 trucks last month, a 31.2% drop from a year earlier. Year-to-date, Mack’s sales have fallen 19.8% to 8,129.

Sales of DTNA’s Western Star trucks jumped 37.4% to 261 last month from 190 a year earlier. Year-to-date sales have climbed 31.9% to 1,780.