Class 8 Truck Orders Soar 320%

This story appears in the Feb. 14 print edition of Transport Topics.

January orders for new Class 8 trucks skyrocketed 320% to 27,000 from the year-ago level, a clear sign that the industry will enjoy a stronger 2011, two research organizations said last week.

FTR Associates released preliminary data on Feb. 3 showing that truck makers received orders for 27,009 heavy-duty vehicles in January, “a marked improvement from the 6,400 units ordered one year earlier.”

ACT Research Co. released similar data the same day, reporting 27,300 units were ordered in January, a 320% increase from a year ago.

Both research firms said orders averaged less than 20,000 a month from January through October 2010, before starting to gain in November.

“What’s important is that most of these trucks will get built, because the vast majority has been placed for delivery in the next six months,” Kenny Vieth, senior analyst at ACT Research, told Transport Topics. “Customers are coming in and asking, ‘How soon can you build me a truck?’ ”

“We expected orders to ease last month after a strong December, but they have continued to grow, so that this shows the recovery has legs to it,” Eric Starks, president of FTR Associates, told TT.

“By and large, all of the truck producers seem to be participating in the order surge, which is another sign that the recovery is broad-based,” Starks added.

He said that unlike the new truck market in 2010, more medium-sized and small fleets are now buying, which he said was a further indication of a strengthening recovery.

Both firms estimated that the industry’s North American manufacturing total in 2011 would be in the mid-240,000s, with the United States accounting for the lion’s share.

U.S. customers bought 107,152 new Class 8s last year, according to WardsAuto.com, a slight improvement over the 94,798 purchased in 2009.

Several truck dealers said they were cautiously optimistic about the coming year.

“Activities have definitely picked up . . . and I certainly think we’re going to have better sales in general — used, new or parts — than last year,” Jerry Davis, president of Liberty Truck Sales Inc., a Freightliner truck dealer in Birmingham, Ala., told TT.

“Maybe we’re not completely satisfied, but it’s good to get an increase in quotes, and to get some new orders,” he said.

Davis added that the company has just ordered its first trucks since the recession, “because you want to have them ready when you have solid activity.”

“We certainly have seen a heck of a lot more interest in new trucks recently, where we’re quoting guys that haven’t been doing any buying for the past couple years,” Fred Grask, general manager of Cedar Rapids (Iowa) Truck Center, a Peterbilt dealer, told TT.

“We have taken orders for new trucks, but we still have a long ways to go,” Grask added. “However, we have ordered some stock trucks, and that’s certainly been a change. Before, we were trying to get rid of inventory. It’s prudent to start putting new equipment on the lot when customers are wanting new trucks.”

Tim Clevenger, vice president of marketing for Pape Kenworth, which has eight locations in Oregon and California, said the West Coast was still suffering.

“What we are noticing is a slight increase in interest from our fleet customers, [but] vocational truck customers are still working through the difficult economic realities facing the West Coast,” Clevenger told TT.

“The increased interest, however, from fleets does give us long-term optimism that the Western market may, in fact, be seeing the glimmers of a turnaround in the economy,” Clevenger added.

Some truck manufacturers were optimistic as well.

“January’s preliminary order reports reflect the industry’s optimism regarding the economic recovery and the growing need to replace trucks,” Kevin Flaherty, a senior vice president for Mack Truck, told TT.

Ron Huibers, senior vice president of sales and marketing for Volvo Trucks North America, said that the energy VTNA spent introducing new-technology engines early last year paved the way for a strong showing this year.

“We expect that increased confidence in the economy and our already highly proven EPA 2010 technology will prompt many carriers to begin replacing trucks in their aging fleets,” Huibers told TT.

Navistar Inc., which builds International trucks and its own engines, was not as optimistic.

“The January numbers show that the recovery is coming on but I would be a little cautious, because all of those reported orders aren’t showing up in the production schedule for trucks to be built in the current fiscal year,” spokesman Roy Wiley told TT.

Daimler Trucks North America and Paccar Inc. declined to comment.