Class 8 Truck Sales Up 13.5%

This story appears in the June 21 print edition of Transport Topics.

U.S. retail sales of Class 8 trucks topped weak year-over-year comparisons for the fifth straight month in May, this time by 13.5%, WardsAuto.com reported.

For-hire truckers and private fleets bought 7,895 heavy trucks last month, up from 6,955 during the previous May. The year-to-date figure rose to 40,361 units from 35,451 through the first five months of 2009, an increase of 13.9%.

Sales of Class 6 trucks surged 135.5%.

Original equipment manufacturers and dealers said they appreciated the gains they could take, but no one reported a return to robust sales levels. ACT Research Co. did say, though, that orders for new heavy-duty trucks are still rising, and reports of good used-truck sales also continue — two activities that usually indicate better new-truck sales are coming.

The June 10 report from Ward’s said most OEMs posted volume increases in May, although two experienced contraction.

“We’re still somewhat slow in new truck sales. . . . The increase in price for the new engines makes some customers a little hesitant,” said John Nichols, president of Palmer Truck Group, Indianapolis, a Kenworth dealer.

“There’s more quoting activity for new trucks, and used truck sales have picked up a bunch. . . . Things were so dramatically bad a year ago that every little bit of improvement is very welcome, but the actual unit count is still low,” Nichols said.

Ward’s reported that Navistar finished first last month, selling 2,684 heavy trucks, a 34.1% improvement over the 2,001 in May 2009. Year-to-date sales for Navistar rose 12.4% to 11,333 vehicles, second behind Freightliner Trucks of Daimler Trucks North America.

“We’re pleased with the improvement, but sales still have a way to go,” said Navistar Inc. spokesman Roy Wiley.

During its earnings call with analysts earlier in the month, Navistar, Warrenville, Ill., said that, from February through April, it took in 9,600 orders for new Class 8s, a 55% increase from the same fiscal quarter last year (click here for previous story).

At Freightliner of Arizona, which has four locations in the state, owner Danny Cuzick said he has seen moderate increases in buyers and serious shoppers for new Class 8s. As with Palmer’s Nichols, he also reported better sales and pricing for recent used equipment.

“I’ve had customers with 10 trucks, but only five were working. Now all 10 are working,” Cuzick said. He added that truck buyers are curious about the new engines for this year but also concerned about the price increases of about $9,000 a truck.

“My crystal ball says the fourth quarter will be fairly decent and 2011 will be strong,” Cuzick said.

Freightliner sold 2,233 trucks for the month, an 18.8% improvement over the 1,879 units it moved the May before. Cumulative sales are up 33.8% to 13,129 vehicles.

ACT Research Co. said June 10 it increased its estimate for North American heavy-duty truck production by 4,500 units to 145,500 for this year. In 2009, OEMs made 118,400 big trucks and 205,600 the previous year, according to ACT.

Kenny Vieth, ACT partner and senior analyst, said OEMs built more trucks during the second quarter than originally anticipated because of stockpiling 2009 engines. However, he predicted this trend will not lead to a third-quarter sales bust.

“The supply and demand of available trucks relative to freight to be hauled has cleared out more quickly than most people would have thought, and we have been surprised, incrementally, on the upside for orders through May,” Vieth said.

Asked when U.S. retail monthly sales might next top 15,000 units or 17,000 for North America — levels once typical but not seen since early 2007 — Vieth said his models and intuition point toward around March.

Nuss Truck & Equipment, based in Rochester, Minn., sells Macks and Volvos in seven locations in Minnesota and Wisconsin. CEO Robert Nuss said new truck sales in his region are still relatively slow. He recommended a tax incentive to compensate for the required introduction of new engines made more expensive through sophisticated pollution controls.

“You can mandate the production of new engines, but if people don’t buy them, what’s the point? A tax credit for this would also put people back to work in manufacturing,” Nuss said.