Class 8 Truck Sales Nosedive 31.2% in June

This story appears in the July 20 print edition of Transport Topics.

Heavy-duty U.S. retail truck sales continued to sag in June, leading to the most anemic first-half sales record in at least 20 years, according to the latest monthly survey by WardsAuto.com.

Original equipment manufacturers and their dealers sold just 43,457 trucks for the year’s first six months, a 33.4% decline from the 65,268 units moved during the same time in 2008, Ward’s said July 9. The monthly tally was 8,006 vehicles, down 31.2% from the 11,637 trucks sold in June 2008.

Navistar Inc. was the only truck maker to post a sales gain for the month, and credited purchases by large customers. All other manufacturers saw their monthly volume erode by more than 35% relative to last June.

“There seems to be more people asking for prices, and that’s good, but no one’s pulling the trigger,” said Cooper Sykes, owner of Cooper Kenworth.

“We had hoped for more results from the stimulus spending, but there were only one or two contracts from that. I can’t see any sustained uptick; it’s more of one week up and then one week down,” said Sykes, who operates throughout North Carolina.

“New and used sales are just stagnant. . . . People are on indefinite hold,” said Peterbilt dealer Kenneth Doonan of Wichita, Kan.

Doonan commented after meet-ing with other Peterbilt dealers from around the nation and said that reports of slow sales were consistent.

The current six-month total for Class 8s is the lowest since 1989, when Ward’s started its truck sales survey. The Motor Vehicle Manufacturers Association kept data before then, but that association is now defunct.

ACT Research Co. reported that orders for new North American Class 8 trucks have been stuck consistently below 10,000 units for the past six months.

“Orders are still pretty weak, remaining well below last year’s level for the year to date,” said Steve Tam, an ACT vice president. “And there’s nothing on the horizon to indicate a change. Industrial production, for in-stance, is dismal at best,” he said.

On July 15, the Federal Re-serve System said its U.S. industrial production index fell again in June to the lowest level since the summer of 1998. The industrial production index is closely watched by freight transportation executives and has fallen in 16 of the last 18 months after peaking in December 2007.

One possible good sign, however, is that the factory output index fell by the smallest amount since October, the last time it actually increased.

Navistar spokesman Roy Wiley said the company benefited from sales of its International trucks to a large leasing company and two big private fleets. He also said the manufacturer had some good sales of WorkStar and PayStar severe-service tractors to three state governments and to the federal government.

Wiley said the company’s sales force has been stressing the importance of fuel efficiency by Navistar’s trucks.

The Warrenville, Ill., company sold 2,752 trucks for the month, a 19.4% increase over the 2,305 units in June 2008.

Navistar holds first place in market share for both the month and year to date. Its six-month sales are down only 13.6% from last year, the least deterioration of any OEM.

Conversely, Volvo Trucks North America has been hit hardest by the sales slump. It sold 437 tractors for the month, a 61.6% plunge from 1,137 in June 2008. Its half-year sales fell 50.9%.

“The North American truck market continues at a very low level,” said VTNA Senior Vice President Scott Kress. “In particular, one of Volvo Trucks’ primary segments, regional truckload, has been heavily affected by the economic crisis and freight drought. These customers have adopted a wait-and-see approach to the economy and are deferring purchases until an upturn is in sight.”

“Volvo Trucks has also chosen to avoid deals which do not meet our financial targets. This is not always an easy course to take, but it is necessary for us to maintain pricing that reflects the real value of our trucks,” Kress said.

Freightliner Trucks, the flagship brand of Daimler Trucks North America, finished second to Navistar for both the month and year to date. In June, Daimler sold 1,934 big trucks, a 37.5% decline from 3,093 in June 2008. Six-month sales were down by 28.4%.

Peterbilt Motors and Kenworth Truck Co., the two brands of Paccar Inc., took third and fourth places.

Peterbilt sold 1,037 heavy trucks in June, a 36.1% decline, year-over-year. Half-year volume is down by 38.9%.

Kenworth moved 891 units, a 38.8% decline from 1,456 last June. Its six-month fall-off was 41.1%.

Volvo’s sister company, Mack Trucks Inc., finished just ahead of Volvo in fifth place. Mack sold 623 Class 8s for the month, a decline of 47.7% from the 1,137 units last year. Its half-year decline was 47.1%.

Daimler’s two smaller brands — Sterling and Western Star Trucks — completed the roster. Although Sterling is being eliminated, it still sold 288 trucks for the month, down 60% from 720 last June. Its year-to-date volume fell 47.2%.

Western Star sold 42 trucks for the month, compared with 106 in June 2008. Year to date, the brand’s Class 8 volume has declined 44.1%.