Class 8 Truck Orders Take Downward Turn in June
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North American Class 8 truck orders ended three months of year-over-year gains in June, according to ACT Research.
ACT preliminary data showed orders fell 12% to 14,800 units. They also experienced a drop of 37% from the previous month. To date, June and March are the only months to experience year-over-year declines in 2024.
“Even in good years, Q2 typically delivers below-trend orders, while Q4 orders can trigger optimism at the bottom of the cycle,” said Kenny Vieth, president and senior analyst at ACT. "With the long bottom in freight volumes and rates continuing in the most recent data from DAT amid lingering market overcapacity, for-hire carriers’ financial performance has been dismal.”
Vieth added that entering the historically worst time of the year for orders, at the bottom of profitability cycle for buyers, is producing results in line with expectations. He also noted that the brightest spot in the economy has been consumer services spending, which has especially helped to support steady medium-duty truck demand.
Mack's Jonathan Randall says there is a continued strong demand for straight trucks. (John Sommers II for Transport Topics)
“We’re seeing exciting opportunities in the Class 8 market, particularly with the continued strong demand for straight trucks,” Mack Trucks North America. President Jonathan Randall said. “While tractor orders are adjusting from their peak levels, this shift allows us to showcase Mack’s versatility across our product line.
“At Mack Trucks, we’re leveraging our industry-leading innovation to meet evolving customer needs in all segments. The current market dynamics reaffirm our strategy of continuous improvement and customer-focused solutions.”
FTR Transportation Intelligence issued a report that said Class 8 preliminary net orders for June came in at 13,100 units, down 33% month-over-month and 6% year-over-year. The report noted that orders came in on the low side of historically normal market results. But it also indicated that this follows a five-month period of sustained strength in orders.
Moyer
“OEMs are actively filling build slots at a steady pace,” said Dan Moyer, senior analyst of commercial vehicles at ACT. “Along with the month-over-month increase, the fact that orders were up significantly from the May 2023 level indicates that the market remains on a solid footing despite near-term challenges. While all OEMs experienced order growth, vocational markets stood out as particularly strong compared to on-highway.”
Moyer added fleets also remain willing to invest in new equipment despite the trend of stagnant freight markets. He noted that order levels slightly exceeded historical averages and seasonal expectations. He still anticipates a replacement level of output by the end of the year. Class 8 orders for the past 12 months have now totaled 273,700 units.
"We also see customers are currently planning their purchasing decisions for the next two years," VTNA's Magnus Koeck says. (Joe Howard/Transport Topics)
“Even if we at Volvo saw a slight uptick in orders for the month of June over what we had in May this year, the industry orders dropped significantly in June vs. May, 12,655 orders in June vs. 19,877 in May for U.S. and Canada,” said Magnus Koeck, vice president of strategy, marketing and brand management at Volvo Trucks North America. “Uncertainty in the political climate remains high, and freight rates remain down currently as the market is amid a correction. We also see customers are currently planning their purchasing decisions for the next two years, and that can also contribute to lower industry order numbers as well.
“We remain optimistic that as we wrap our in-person launch activities for our all-new Volvo VNL, we will see our customers placing those orders for the last quarter of 2024.”
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