Dec. Truck Sales Fall 54.5% to Close Worst Year Since ’03
By Jonathan S. Reiskin, Associate News Editor
This story appears in the Jan. 21 print edition of Transport Topics.
U.S. truck sales finished their worst year since 2003 last month, plummeting 54.5% from the level of December 2006. For the entire year, U.S. heavy-duty sales during 2007 were 46.8% below the record set last year, according to data supplied by WardsAuto.com.
Truck manufacturers sold 150,965 Class 8 trucks in 2007, as truck buyers first avoided buying vehicles with engines made to meet tougher federal emission standards and then were hit by the declining national economy, dragged down mainly by housing and mortgage-financing losses.
Original equipment manufacturers and their dealers sold just 12,034 Class 8 trucks last month, compared with 26,462 in December 2006, which was the industry’s busiest month ever.
However, new orders for heavy-duty trucks offered a glimmer of hope, growing substantially in December, the third consecutive month that orders have grown, according to one research firm.
Nevertheless, some dealers re-mained cautious. “These were the softest results I’ve seen in 18 years of doing this, in terms of profits,” said Gary Gibson, president and owner of Tri-State Sterling Trucks in Cincinnati.
As vice chairman of the American Truck Dealers trade association, Gibson said he speaks on a regular basis with other dealers and that the Midwest and Northeast are still hurting for sales, while dealerships elsewhere have been more resilient.
The last time annual retail sales were below 200,000 was 2003, when OEMs sold 141,964 Class 8 units. The results that year also were affected by a change in federal pollution regulations.
Tightening emission standards in both January 2007 and October 2002 have led to heavy “pre-buys” before the fact and substantial sales slumps afterward.
Data from A.C.T. Research Co. show that a recovery might soon be under way. Analyst Peter Nesvold, who follows heavy manufacturing for Bear, Stearns & Co., said the A.C.T. surveys show orders for new Class 8s grew from October through December on a year-over-year basis.
The October growth rate was a scant 0.9%, but that accelerated to 9% the following month and 16.7% in December.
Gibson said that, while December was “really, really soft — since the first of the year, we’ve had more activity, a little burst of it.” Talking with fellow truck dealers in economically battered Ohio, Michigan and Indiana has kept him from being more optimistic, though.
The year “2007 was not as robust as we thought it might have been, even though we knew in general what would happen,” said Roy Wiley, spokesman for International Truck and Engine Corp. “Results came in even lower than projected.”
Wiley said the company is still expecting improvement from last year to this year, but so far, the truck and engine manufacturer has not seen a surge in orders.
Though none of the major OEMs increased their heavy-duty sales volumes, 2007 hammered the OEMs in different ways. Daimler Trucks North America offered the most dramatic example.
The company’s Freightliner brand shed 52.3% of its 2006 sales volume, resulting in a decline in market share to 24.8% from 27.6%. However, Sterling and Western Star had the smallest percentage losses of any OEM, dropping 27.9% and 34.1%, respectively.
As a result, Sterling’s annual market share increased to 8% from 5.9% in 2006, while Western Star inched up to 1.5% from 1.2%.
Mack Trucks had the highest percentage decline of any OEM, losing 54.5% of volume from 2006 to 2007.
Freightliner remained the single most-popular brand for both the year and the month. In December, it sold 2,583 vehicles, a decline of 61.4%, compared with 6,688 at the end of 2006.
International was the second most popular, selling 2,521 for the month, down 37.2% from December 2006. International increased its annual market share to 19.7% from 18.8% in 2006.
International’s Wiley said management was pleased with the market-share gain but that 20% had been its goal.
At Paccar Inc., Peterbilt Motors lost 54.1% of monthly sales, dropping to 1,564 units from 3,407 heavy vehicles a year ago. Sister company Kenworth Trucks sold 1,385 big trucks, down 57.1% from 3,225 units in December 2006.
Within Volvo AB, Volvo Trucks North America moved 1,802 units for the month, down 48.5% from 3,499 heavy trucks a year ago. Sister firm Mack sold 1,234 heavy trucks for the month, a 66.1% decline from 3,641 units the December before.
Sterling sold 782 big trucks for the month, a 49.2% decline from the 1,540 units the year before. Western Star moved 113 heavy vehicles, down 69.1% from 366 in December 2006.
This story appears in the Jan. 21 print edition of Transport Topics.
U.S. truck sales finished their worst year since 2003 last month, plummeting 54.5% from the level of December 2006. For the entire year, U.S. heavy-duty sales during 2007 were 46.8% below the record set last year, according to data supplied by WardsAuto.com.
Truck manufacturers sold 150,965 Class 8 trucks in 2007, as truck buyers first avoided buying vehicles with engines made to meet tougher federal emission standards and then were hit by the declining national economy, dragged down mainly by housing and mortgage-financing losses.
Original equipment manufacturers and their dealers sold just 12,034 Class 8 trucks last month, compared with 26,462 in December 2006, which was the industry’s busiest month ever.
However, new orders for heavy-duty trucks offered a glimmer of hope, growing substantially in December, the third consecutive month that orders have grown, according to one research firm.
Nevertheless, some dealers re-mained cautious. “These were the softest results I’ve seen in 18 years of doing this, in terms of profits,” said Gary Gibson, president and owner of Tri-State Sterling Trucks in Cincinnati.
As vice chairman of the American Truck Dealers trade association, Gibson said he speaks on a regular basis with other dealers and that the Midwest and Northeast are still hurting for sales, while dealerships elsewhere have been more resilient.
The last time annual retail sales were below 200,000 was 2003, when OEMs sold 141,964 Class 8 units. The results that year also were affected by a change in federal pollution regulations.
Tightening emission standards in both January 2007 and October 2002 have led to heavy “pre-buys” before the fact and substantial sales slumps afterward.
Data from A.C.T. Research Co. show that a recovery might soon be under way. Analyst Peter Nesvold, who follows heavy manufacturing for Bear, Stearns & Co., said the A.C.T. surveys show orders for new Class 8s grew from October through December on a year-over-year basis.
The October growth rate was a scant 0.9%, but that accelerated to 9% the following month and 16.7% in December.
Gibson said that, while December was “really, really soft — since the first of the year, we’ve had more activity, a little burst of it.” Talking with fellow truck dealers in economically battered Ohio, Michigan and Indiana has kept him from being more optimistic, though.
The year “2007 was not as robust as we thought it might have been, even though we knew in general what would happen,” said Roy Wiley, spokesman for International Truck and Engine Corp. “Results came in even lower than projected.”
Wiley said the company is still expecting improvement from last year to this year, but so far, the truck and engine manufacturer has not seen a surge in orders.
Though none of the major OEMs increased their heavy-duty sales volumes, 2007 hammered the OEMs in different ways. Daimler Trucks North America offered the most dramatic example.
The company’s Freightliner brand shed 52.3% of its 2006 sales volume, resulting in a decline in market share to 24.8% from 27.6%. However, Sterling and Western Star had the smallest percentage losses of any OEM, dropping 27.9% and 34.1%, respectively.
As a result, Sterling’s annual market share increased to 8% from 5.9% in 2006, while Western Star inched up to 1.5% from 1.2%.
Mack Trucks had the highest percentage decline of any OEM, losing 54.5% of volume from 2006 to 2007.
Freightliner remained the single most-popular brand for both the year and the month. In December, it sold 2,583 vehicles, a decline of 61.4%, compared with 6,688 at the end of 2006.
International was the second most popular, selling 2,521 for the month, down 37.2% from December 2006. International increased its annual market share to 19.7% from 18.8% in 2006.
International’s Wiley said management was pleased with the market-share gain but that 20% had been its goal.
At Paccar Inc., Peterbilt Motors lost 54.1% of monthly sales, dropping to 1,564 units from 3,407 heavy vehicles a year ago. Sister company Kenworth Trucks sold 1,385 big trucks, down 57.1% from 3,225 units in December 2006.
Within Volvo AB, Volvo Trucks North America moved 1,802 units for the month, down 48.5% from 3,499 heavy trucks a year ago. Sister firm Mack sold 1,234 heavy trucks for the month, a 66.1% decline from 3,641 units the December before.
Sterling sold 782 big trucks for the month, a 49.2% decline from the 1,540 units the year before. Western Star moved 113 heavy vehicles, down 69.1% from 366 in December 2006.
