Class 8 Truck Sales Plunge in April
April’s 45% Decline Greatest Since March 2001
By Andrea Fischer, Staff Reporter
This story appears in the May 21 print edition of Transport Topics. Click here to subscribe today.
Sales of new Class 8 trucks plunged 45% in April, compared with a year earlier, the most severe decline in six years.
The dramatic drop means the market is no longer being sustained by leftover inventories of trucks with engines built before Jan. 1, when tougher federal emission rules kicked in and prices for new vehicles increased, analysts said.
The primary reason truck sales haven’t fallen as much in recent months is that, until now, buyers have been able to purchase trucks with 2006 engines, the analysts said.
“Each month this year, we’ve seen the pre-buy of trucks with 2006 engines decreasing. The April numbers confirm that that pre-buy is now over,” said Chris Brady, president of Commercial Motor Vehicle Consulting. “Now, you can only find 2006 engines” at scattered truck dealerships.
Original equipment manufacturers sold 13,373 heavy-duty trucks in the United States last month, down from the 24,297 sold in April 2006, according to data from Wardsauto.com.
Cumulatively, sales in 2007 were down 28.2% to 64,489, compared with 89,820 for the first four months of last year.
April’s year-over-year falloff was the largest since March 2001, when sales plummeted nearly 47% from 23,562 in March 2000 to 12,505 following the start of a brief nationwide recession.
“April sales were pretty low — they were worse than anticipated,” Brady said. “During the next few months we would expect retail sales to remain at low volumes, but this low point means that a gradual recovery is beginning, which will slowly gain momentum.”
Truck manufacturers have predicted heavy-duty truck sales would fall off by 40% or more this year, following the record 284,008 vehicles sold in 2006. The most recent comparable yearly decrease in truck sales was in 2001, when OEMs saw nearly a 34% decline in sales from 2000 levels, due to a recession, Brady said. Sales fell from 211,521 units in 2000 to 139,614 units in 2001.
Another potential factor in truck sales is freight tonnage, which has fallen this year, although economists have predicted that volume will increase later in the year (5-14, p. 1).
Now, “we have to balance capacity and freight,” said Satish Jindel, president of SJ Consulting Group. “The April [truck sales] numbers show the beginning of that balancing.” If truck tonnage increases, “that will absorb” some of the excess capacity in the Class 8 market, caused in part by the 2006 pre-buy, Jindel said. “Economic analysts are watching to see if the second half of the year will pick up, in terms of truck tonnage.”
Analysts said the pre-buy did not have as much of an effect on medium-duty truck sales (see story, p. 28).
Freightliner LLC, the largest North American truck maker, sold the most trucks in April, although its total of 3,638 was a 43.5% drop from 6,442 the previous April.
Year-to-date sales of Freightliner Trucks have fallen 22% to 19,964 vehicles, but its market share has grown 2.5 percentage points to 31%.
Calls to Freightliner were not returned.
International Truck and Engine Corp. sold 2,568 heavy trucks last month, down 49.5% from 5,083 in April 2006. International has lost 1.4 percentage points of its Class 8 market share of 19.1% from a year ago, as sales so far this year have fallen 33.5% to 11,421 units.
The numbers “are really no surprise,” said Roy Wiley, spokesman for International. However, “things are going slower than expected,” in terms of any recovery, he said.
Leif Johansson, chief executive officer of Swedish truck maker Volvo AB, said May 11 the North American truck market has dropped “significantly.” Johansson said the slowdown hurt the company’s first-quarter earnings and will continue to dampen profits into the second quarter.
Both of his North American truck-making units — Mack Trucks and Volvo Trucks North America — posted significant sales declines in April.
Mack sold 1,086 Class 8s, a 58.5% drop in sales from 2,614 in the same month last year. Mack’s year-to-date sales have fallen 46% to 5,220 from 9,659 in 2006, decreasing the company’s annual market share by 2.7 percentage points to 8.1%, the largest decline in market share among Class 8 brands.
“As expected, coming out of the massive pre-buy, demand for heavy-duty trucks continues to be weak,” said Mack spokesman John Walsh. “With the market already saturated with 2006 products, many customers simply do not need new trucks right now,” he told Transport Topics.
Similarly, VTNA posted the biggest monthly decline of all OEMs in April. Its sales plunged 60.7% to 1,059 last month, compared with 2,692 in April 2006. VTNA’s year-to-date sales have fallen 32% to 6,847 units from 10,062 in 2006.
Wards’ data also showed that monthly sales for Kenworth Trucks dropped 35.7% as compared with April 2006, to 1,665 vehicles from 2,591. Nevertheless, the company posted a 0.8 percentage point gain in annual market share from a year ago, to 11.6%.
Peterbilt Motors, which like Kenworth is a unit of Paccar Inc., sold 1,633 Class 8 units for the month, a 44.1% drop from 2,922 in April 2006. So far this year, the company’s sales totaled 7,445, or 30.5% lower than the 10,715 units for the same period in 2006.
This story appears in the May 21 print edition of Transport Topics. Click here to subscribe today.
Sales of new Class 8 trucks plunged 45% in April, compared with a year earlier, the most severe decline in six years.
The dramatic drop means the market is no longer being sustained by leftover inventories of trucks with engines built before Jan. 1, when tougher federal emission rules kicked in and prices for new vehicles increased, analysts said.
The primary reason truck sales haven’t fallen as much in recent months is that, until now, buyers have been able to purchase trucks with 2006 engines, the analysts said.
“Each month this year, we’ve seen the pre-buy of trucks with 2006 engines decreasing. The April numbers confirm that that pre-buy is now over,” said Chris Brady, president of Commercial Motor Vehicle Consulting. “Now, you can only find 2006 engines” at scattered truck dealerships.
Original equipment manufacturers sold 13,373 heavy-duty trucks in the United States last month, down from the 24,297 sold in April 2006, according to data from Wardsauto.com.
Cumulatively, sales in 2007 were down 28.2% to 64,489, compared with 89,820 for the first four months of last year.
April’s year-over-year falloff was the largest since March 2001, when sales plummeted nearly 47% from 23,562 in March 2000 to 12,505 following the start of a brief nationwide recession.
“April sales were pretty low — they were worse than anticipated,” Brady said. “During the next few months we would expect retail sales to remain at low volumes, but this low point means that a gradual recovery is beginning, which will slowly gain momentum.”
Truck manufacturers have predicted heavy-duty truck sales would fall off by 40% or more this year, following the record 284,008 vehicles sold in 2006. The most recent comparable yearly decrease in truck sales was in 2001, when OEMs saw nearly a 34% decline in sales from 2000 levels, due to a recession, Brady said. Sales fell from 211,521 units in 2000 to 139,614 units in 2001.
Another potential factor in truck sales is freight tonnage, which has fallen this year, although economists have predicted that volume will increase later in the year (5-14, p. 1).
Now, “we have to balance capacity and freight,” said Satish Jindel, president of SJ Consulting Group. “The April [truck sales] numbers show the beginning of that balancing.” If truck tonnage increases, “that will absorb” some of the excess capacity in the Class 8 market, caused in part by the 2006 pre-buy, Jindel said. “Economic analysts are watching to see if the second half of the year will pick up, in terms of truck tonnage.”
Analysts said the pre-buy did not have as much of an effect on medium-duty truck sales (see story, p. 28).
Freightliner LLC, the largest North American truck maker, sold the most trucks in April, although its total of 3,638 was a 43.5% drop from 6,442 the previous April.
Year-to-date sales of Freightliner Trucks have fallen 22% to 19,964 vehicles, but its market share has grown 2.5 percentage points to 31%.
Calls to Freightliner were not returned.
International Truck and Engine Corp. sold 2,568 heavy trucks last month, down 49.5% from 5,083 in April 2006. International has lost 1.4 percentage points of its Class 8 market share of 19.1% from a year ago, as sales so far this year have fallen 33.5% to 11,421 units.
The numbers “are really no surprise,” said Roy Wiley, spokesman for International. However, “things are going slower than expected,” in terms of any recovery, he said.
Leif Johansson, chief executive officer of Swedish truck maker Volvo AB, said May 11 the North American truck market has dropped “significantly.” Johansson said the slowdown hurt the company’s first-quarter earnings and will continue to dampen profits into the second quarter.
Both of his North American truck-making units — Mack Trucks and Volvo Trucks North America — posted significant sales declines in April.
Mack sold 1,086 Class 8s, a 58.5% drop in sales from 2,614 in the same month last year. Mack’s year-to-date sales have fallen 46% to 5,220 from 9,659 in 2006, decreasing the company’s annual market share by 2.7 percentage points to 8.1%, the largest decline in market share among Class 8 brands.
“As expected, coming out of the massive pre-buy, demand for heavy-duty trucks continues to be weak,” said Mack spokesman John Walsh. “With the market already saturated with 2006 products, many customers simply do not need new trucks right now,” he told Transport Topics.
Similarly, VTNA posted the biggest monthly decline of all OEMs in April. Its sales plunged 60.7% to 1,059 last month, compared with 2,692 in April 2006. VTNA’s year-to-date sales have fallen 32% to 6,847 units from 10,062 in 2006.
Wards’ data also showed that monthly sales for Kenworth Trucks dropped 35.7% as compared with April 2006, to 1,665 vehicles from 2,591. Nevertheless, the company posted a 0.8 percentage point gain in annual market share from a year ago, to 11.6%.
Peterbilt Motors, which like Kenworth is a unit of Paccar Inc., sold 1,633 Class 8 units for the month, a 44.1% drop from 2,922 in April 2006. So far this year, the company’s sales totaled 7,445, or 30.5% lower than the 10,715 units for the same period in 2006.
