Dec. Truck Sales Up 8.6%

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

Heavy-duty truck sales climbed in December to the highest level in two years for the final month before the bonus depreciation tax benefit expired at year’s end.

Manufacturers sold 19,695 Class 8 trucks in the United States in December, an 8.6% increase from the same month and a 35.7% jump from the 14,511 vehicles sold in November,WardsAuto.com reported.

Last month also marked the fourth straight month of year-over-year sales growth, following a string of 12 declines.

Despite the strong finish to 2013, full-year sales of 184,784 still fell 5.1% short of the 194,715 trucks sold in 2012. Even so, 2013 was the second-best year for Class 8 sales since 2006, when fleets were buying  ahead of new emissions standards.

Meanwhile, medium-duty sales reached their highest level in more than five years as manufacturers sold a total of 16,157 Classes 4-7 trucks in December.

“Replacement demand continues to be a driver of Class 8 sales,” said John Walsh, vice president of marketing at Mack Trucks. “Strong freight demand during the second half of 2013, coupled with customers taking advantage of the bonus depreciation before it expired Dec. 31, contributed to the strong December results as well.”

Walsh also cited encouraging economic news, growth in new housing starts and manufacturing, and the two-year budget deal from Congress.

“Pull all of that together, and you’ve got some pretty strong industry tailwinds,” Walsh said.

Dick Witcher, CEO of Minuteman Trucks, an International dealer in Walpole, Mass., said bonus depreciation “certainly was a factor” at his dealership.

Witcher, who also is chairman of American Truck Dealers, said some fleets “planned for it well in advance and were very determined to get their trucks paid for and registered and put on the road so they could qualify for the bonus depreciation.”

In the absence of bonus depreciation, he said of 2014: “It’s not going to be over the top.”

Magnus Koeck, Volvo Trucks’ vice president of marketing and brand management, said, “Key economic indicators and freight volumes remain positive, which we feel bodes well for the industry in 2014.”

“We anticipate about a 250,000 truck Class 8 market in North America this year, primarily driven by replacement demand,” he added.

Navistar International Corp. sees 2014 as “a year of modest growth,” said Bill Kozek, president of the company’s North American truck and parts business.

“Customers are still cautiously optimistic about the economic environment, and they are concerned about the driver shortage and hours-of-service restrictions,” he said.

Navistar forecasts Class 8 retail sales to be between 220,000 and 230,000 units in the United States and Canada, Kozek said.

Five of the seven North American nameplates posted higher December sales than a year earlier.

Daimler Trucks North America’s Freightliner brand sold 6,731 Class 8 trucks in December, a 22.7% gain from a year earlier. For full-year 2013, Freightliner’s sales totaled 67,568, up 5.6% from 2012. The brand ended the year as the industry’s clear market-share leader with 36.6%.

David Hames, DTNA’s general manager of marketing and strategy, reiterated that his company anticipates a market with “slight upside potential” in 2014.

Kenworth Truck Co., an operating company of Paccar Inc., recorded 3,120 sales in the final month of the year, up 11.2% year-over-year. Kenworth sold 25,943 trucks in 2013, down 6.6% from the previous year, but good for 14% market share.

Volvo Trucks was the third best-selling brand last month with 2,520 trucks sold, a 5% gain from a year ago. For the full year, the company’s sales slipped 1.3% to 20,658 for 11.2% share of the market.

Peterbilt Motors Co., which is part of Paccar, notched 2,454 sales in December, down 8.7% from the same month last year. The company’s 2013 sales totaled 24,717, down 9.3% from 2012 but still representing 13.4% of the market.

Mack, which is part of Volvo Group, posted the industry’s largest percentage gain. Mack sold 2,330 trucks during the month, up 29.3%. For the year, though, the company’s sales declined 6% to 16,289 for 8.8% market share.

Navistar slipped to sixth place with 2,207 Class 8 sales in December, down 17.3% from a year earlier. For the year, though, the company’s International trucks remained the No. 2 seller in the United States, with 14.4% market share, despite a 23.7% decline in sales to 26,555 units.

Navistar has been working to regain market share lost because a previous emissions technology failed.

In a note to clients of Robert W. Baird & Co., analyst David Leiker cited “falling expectations for a cyclical recovery in North American Class 8 demand” in 2014, predicting that the market will remain at replacement levels, or about 260,000 units per year, “for the foreseeable future.”

DTNA’s Western Star brand sold 330 trucks in December, up 18.3%. Western Star’s 2013 sales rose 14.7%, to 3,008, or 1.6% of the total market.