Editorial: Growth in Truck Sales Continues

Truck sales remained strong during March, as fleets bought 17,308 heavy-duty vehicles, 33% more than they bought in March 2011.

That’s the good news.

The less good news is that, also during March, Class 8 orders for future delivery dipped 31% from a year earlier, although still reaching a reasonably strong level of 20,000 vehicles.

Last March, as the industry was really beginning to recover from the long recession, fleets ordered almost 30,000 trucks, a very strong total.

But it does appear of late that there has been a noticeable easing of demand, enough so that two truck makers took steps to reduce their output for the short run.

Kenworth Truck Co. is cutting employment at its Chillicothe, Ohio, plant by 10%. While Kenworth wouldn’t say how many workers that amounted to, sources said the plant has been employing between 2,000 and 2,500 workers.

At the same time, Volvo Trucks announced that it would shut its New River Valley factory in Dublin, Va., for a week in late April and a week in early June to better match production and sales.

While it’s never good news to hear of production reductions, clearly it’s not time to hit any panic buttons.

Daimler Trucks North America, Navistar and Mack Trucks all indicated they were continuing their current production schedules.

And several truck dealers we spoke with said business continues to be strong, if a bit slower than in the recent past.

February tonnage levels were strong, showing a 5.5% increase over year-ago levels, according to American Trucking Associations’ monthly index. That is a healthy increase and marked the 27th consecutive gain.

Freight totals now are about 18% higher than at the worst of the recession in 2009, as domestic manufacturing has made a reasonably strong recovery, even though the construction sector continues to lag.

And if freight volumes continue to grow, heavy-duty truck demand surely will follow suit.

Class 8 truck manufacturers did a commendable job of getting through the recession without the mass of red ink that accompanied the previous major economic downturn. And they’ve shown restraint as sales have rebuilt, expanding their workforces but avoiding the temptation to overbuild capacity.

The current dip in activity most likely is a temporary one that will be forgotten soon, as the pace of economic activity grows.