Class 8 Truck Orders Drop 16% Year Over Year in August
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North American Class 8 truck orders continued to trend below the year-ago period in August, according to ACT Research.
ACT preliminary data showed orders fell 16% year over year to 16,400 units, but they were up from July. This marks the third consecutive month that orders were lower than the prior year. However, the seasonal adjustment for the month puts the figure at 18,600 units.
“Class 8 orders remained at directionally and seasonally expected levels in August,” said Kenny Vieth, president and senior analyst at ACT. “Historically, August is the last month of weak orders before the OEMs open their books to next year’s orders. As such, the month enjoys a large seasonal factor that boosts Class 8 orders nearly 12% above nominal levels.”
Vieth noted that orders aligned with moderating expectations, driven by ongoing factors: overcapacity in the tractor market, historically low for-hire carrier profits and stagnant freight rates.
[September State of the Industry: Classes 5-8 Vehicles Update] - Preliminary Class 8 Truck Net Orders in August
Read more from the preliminary update here: https://t.co/Mw4KjrxZEB pic.twitter.com/24yMQOjRG2 — ACT Research (@actresearch) September 5, 2024
“The industry saw an overall increase in orders for the month of August, which was expected after orders were down in June and July due to seasonality,” said Magnus Koeck, vice president of strategy, marketing and brand management at Volvo Trucks North America. “At the beginning of the year, we believed we’d start to see the early pre-buys start, but now we may not see those pre-buys until the second or third quarter of 2025.
Koeck
“The industry is still faced with a lot of uncertainty with the economy and the political environment, which is impacting fleet purchasing decisions. Freight rates and spot rates are still on a very low level, and customers are hesitant to order.”
Volvo Trucks has begun delivering early-production Volvo VNL units and expects series production to start soon. Koeck is confident orders will grow as these units reach dealers and customers, positioning the company well for 2025.
“August’s Class 8 truck orders show encouraging momentum, with a solid 24% month-over-month increase,” Mack Trucks North America President Jonathan Randall said. “While the overall freight market is still facing challenges, Mack Trucks continues to see strength in the Class 8 straight truck sector. The vocational market remains solid, with strong construction spending among businesses and manufacturers.”
Randall
FTR Transportation Intelligence reported that Class 8 preliminary net orders for August fell 16% year-over-year to 13,400 units, up 2% month-over-month. Orders came in below seasonal expectations due to the truck freight market lull and nearly full order boards.
“OEMs this month faced a somewhat mixed market, though overall conditions were stable,” said Dan Moyer, senior analyst of commercial vehicles at FTR. “The conventional market outperformed the vocational sector, driving most of the month-to-month improvement. Despite stagnant freight markets, fleets continue to invest in new equipment, albeit at a slower pace.
“We expect further reductions in backlogs once the final Class 8 market data is released later this month and continued growth in already record-high inventory levels. Pressure on OEMs to reduce production rates is mounting.”
FTR also noted that orders for the past 12 months total 271,000 units. Year-to-date performance, however, may indicate that orders are running slightly below replacement demand levels. The report found that strong early-year performance has kept net orders up 14% year-over-year despite three consecutive months of lower orders.
Treadway
“We saw activity, in other words, customer interest,” Kenworth Sales Co. President Kyle Treadway said. “The larger fleets are actually starting to strategize on what’s going to take place here in the next four to five months. But in terms of actually pulling the trigger and placing orders, not as much as we anticipated. We are seeing a few small and medium-size fleets placing orders, but the large guys are still jockeying.”
Treadway added that fleets are gauging the presidential election’s impact and legal challenges to California Air Resources Board truck emission regulations. They’re also waiting for freight market fundamentals to improve.
“We’re all seeing the decline in freight movement, and there’s the hesitation to purchase equipment if you’re not able to put a driver in that seat,” Treadway said. “Then there’s also what’s going on with the freight rates, the spot market, contract rates, etc. There’s just weakness on all those fronts, which together equate to uncertainty and hesitation to even order trucks.”
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