Class 8 Truck Sales Drop 7.3% in 12th Consecutive Downturn

Class 8 truck sales declined 7.3% in August, the 12th consecutive year-over-year downturn, but were about flat from the previous month’s total, WardsAuto.com reported.

U.S. retail sales dipped to 15,288 last month, down from 16,497 in August of 2012, according to Ward’s figures.

On a month-to-month basis, though, sales were nearly flat, slipping 0.3% from the 15,340 trucks sold in July. Monthly sales totals have seen little fluctuation since April, staying within the 15,000-to-16,000 range for five consecutive months.

Through the first eight months of 2013, OEMs have sold 116,468 trucks, down 11.9% compared with the same timeframe last year.

“We continue to see sluggish growth as economic uncertainties cause customers to delay making truck purchases,” said Bill Kozek, president of Navistar’s North American truck and parts business.

Although retail sales have slipped from a year ago, new truck orders have consistently outpaced last year’s levels, according to ACT Research.

Thus far, the increase in order activity hasn’t translated into year-over-year sales growth, but Navistar’s Kozek said his company expects the industry to see a pickup in sales, at least by next year.

“We do anticipate that the growth in order activity will eventually lead to increased retail sales,” he said, projecting that sales will grow by 5% to 10% in 2014. David Hames, general manager of marketing and strategy at Daimler Trucks North America, said his company projects that retail sales will remain “consistent” with the current run-rate for the remainder of 2013.

“It’s difficult to predict exactly how the balance of 2013 will evolve,” said John Walsh, vice president of marketing at Mack Trucks Inc. “The combination of replacement demand and gradual recovery of the construction market point to an improving retail environment.

“That being said,” he added, “there’s still a significant level of caution, given the absence of sustained economic strength and uncertainty associated with upcoming budget and debt ceiling negotiations in Congress.”

Other truck makers did not respond to requests for comment before Transport Topics’ deadline.

According to ACT Research, retail sales of Class 8 trucks throughout North America totaled 20,775 in August, while incoming orders for the month stood at 19,649.

Although the sales total was higher, sales still were down 8.6% year-over-year, but orders were up 21.2%, ACT Vice President Steve Tam said.

That disparity is a reflection of conditions a year ago, when sales were still going strong but orders had slowed, a trend that eventually led some manufacturers to cut production and staffing in early 2013 to better align build rates with incoming orders.

In a Sept. 17 note to clients of Robert W. Baird & Co., analyst David Leiker said that Class 8 supply and demand trends appear to be “in balance,” with replacement demand expected to continue in the near future.

Despite the industrywide sales decline, Kenworth Truck Co. and Volvo Trucks reported double-digit growth in August. All other North American manufacturers reported lower sales than a year ago.

DTNA’s Freightliner brand sold 5,341 trucks in August, down 9% from a year earlier, Ward’s said. For the year to date, Freightliner sales have totaled 44,041, up 4.1% from a year ago and capturing 37.8% market share.

Hames said DTNA’s sales and market share leadership have been driven by customers’ purchases of its Cascadia Evolution trucks and “our increased penetration into vocational segments.”

Paccar Inc.’s Kenworth brand posted the month’s second-highest total with 2,314 trucks sold, up 11.6% from the same month a year ago. Year-to-date, however, sales have slipped 15.8%, to 15,795.

Sales for Paccar’s other North American operating company, Peterbilt Motors Co., declined 5.1%, to 1,934 units. For 2013 to date, Peterbilt sales have totaled 15,599, down 15.9% from last year’s pace.

Navistar International Corp.’s monthly sales dropped 28.1%, to 2,186. Cumulative 2013 sales have slumped 33.1%, to 16,824, as the company has made its transition to engines with selective catalytic reduction technology to meet federal emissions standards.

Navistar’s August market share for retail sales slipped to 14.3%, down from 15.7% in July, according to Ward’s.

The company’s decline in monthly market share “highlights the bumpy nature” of its 13-liter and 15-liter SCR engine rollouts in 2013, J.P. Morgan Securities analyst Ann Duignan said in a Sept. 18 note.

“In our view, improving market share is the most important to Navistar’s long-term financial success,” she said.

Despite the drop in retail sales, Navistar’s share of incoming orders grew to 20% of the market in its fiscal third quarter ended July 31, up from 12% market share in the previous quarter, Kozek said.

Navistar’s new product launches this year have resulted in “improvements in the confidence of International products,” he said.

Volvo Trucks, meanwhile, posted the industry’s largest year-over-year gain as sales climbed 15.3% to 1,757 units in August. The brand’s year-to-date sales of 12,523 still are down 10.1% from 2012, though.

Mack Trucks, which also is part of Volvo Group, sold 1,524 trucks in August, down 4.8% from a year earlier. Total sales for 2013 stand at 9,653, down 17.7% from 2012.

Sales of DTNA’s Western Star brand dropped 35.1% to 226 trucks. Cumulative 2013 sales, however, have risen 18.2%, to 2,006.