Class 8 Truck Sales Down 9.1% in September

This story appears in the Oct. 15 print edition of Transport Topics.

U.S. truck sales fell 9.1% to 14,491 in September, declining for the first time since December 2009 and ending a streak of 32 consecutive year-over-year increases, WardsAuto.com reported.

The Oct. 10 report, the latest sign of a weakening economy and political uncertainty, showed declines in year-over-year sales for every manufacturer except Mack. The sales report followed by one week another reported drop in truck orders, which fell for the ninth consecutive month on a year-over-year basis to 15,600.

September truck orders and sales both fell, the first month this year that has happened. Last month’s sales total was the lowest since January, the month when orders traditionally are weakest. Sales peaked this year in May at 18,012 and January’s order total of 25,200 topped that category.

“There is so much uncertainty with the economy and what is going to happen after the election,” said Kyle Treadway, president of Kenworth Sales Co., West Valley City, Utah, which operates 18 dealerships in seven states. “Customers are hesitant to commit to adding or replacing equipment. We have definitely seen since February a gradual decrease in sales and orders, and that trend continues.”

On the positive side, Mack sales climbed 47.1% from a year earlier to 1,347.

“While order intake remains sluggish amidst uncertainty re-garding economic conditions and the upcoming election, we still expect this to be a relatively good year for both the industry and Mack,” said Vice President of Marketing John Walsh.

Sales of Daimler Trucks North America’s Freightliner tractors fell 3.4% to 5,183. Navistar Inc.’s International nameplate kept its hold on second place although sales plummeted 30% to 2,285.

Paccar Inc.’s Peterbilt and Kenworth brands showed more modest declines. Peterbilt sales fell 7.8% to 2,043, while Kenworth dropped 5.5% to 1,983.

Volvo sales fell more sharply, dropping 18.8% to 1,439.

From a market-share perspective, Freightliner led with 35.8% of Class 8 sales in September, better than its cumulative 32.4% share for the first three quarters. International, however, slipped to 15.8% last month, worse than its 18.7% share for the year to date.

Kenworth and Peterbilt together maintained a market share of about 14% for the month and year to date.

Volvo’s share was 9.9% in September and 9.0% for the year to date. Mack’s share was 9.3% last month, down from 10.4% over nine months. Although sales slipped in September, the 14,491 total handily surpassed that month in 2010, when sales were just 9,402.

The year’s total sales to date were 146,655, 26.1% above last year’s pace.

Two top Daimler Trucks executives last week said that the long-term sales growth picture was strong in the United States (see story, p. 36).

However, they also acknowledged they weren’t sure when sales would pick up and that sales projections are dropping right now.

“We’re not living in paradise now, but the market looks good,” Andreas Renschler, head of Daimler AG’s global trucks division, said at an Oct. 8 press conference in Las Vegas during American Trucking Associations’ Management Conference & Exhibition.

Martin Daum, CEO of Daimler Trucks North America, said the company’s sales forecast for the United States now is 185,000 units, 8.2% above 2011, but well behind estimates that peaked at 219,000 earlier this year.

“Industry sales are running well below expectations of six to 12 months ago but are not in a free fall either,” said a report from BB&T Capital Markets analyst Thom Albrecht. “The high price of new equipment, combined with a lethargic freight environment, has kept many buyers on the sidelines.”

Others also sounded cautious, but hopeful.

“At this point, fleets are still taking a conservative stance on growth, with virtually all our sales coming as replacement units,” Greg Arscott, vice president of the Pete Store Southeast, in Greenville, S.C, told Transport Topics.

“We expect a modest upward trend in the fourth quarter as smaller fleets take advantage of bonus depreciation,” Arscott said. “We continue to see healthy quoting and order intake levels, primarily from larger carriers and fleets in specialized segments.” Arscott said.

Steve Tam, vice president of ACT, also said on Oct. 8 that conflicting economic indicators and the November election were creating uncertainty, hurting orders.

“Industrial production is walking a tightrope between expansion and contraction,” Tam told TT on Oct. 8. “Folks are in the dark about what’s ahead. By default, their decision is to wait and see what happens. Politics exacerbates this. They have a plan A and B. They are just not sure what lever to pull at this point.”

September orders lagged August by 4.6%. Orders have dropped sequentially in four of the past five months.

Tam said ACT’s sales forecasts have been scaled back by about 3%, with sales expected to be similar in 2012 and 2013.

Albrecht said he also believes 2013 essentially will be a repetition of 2012, with sales between 175,000 and 200,000 units, slightly above replacement levels.

Associate News Editor Jonathan Reiskin contributed to this report.