Feb. Class 8 Sales Sink 39% to Lowest Level in 26 Years
This story appears in the March 23 print edition of Transport Topics.
Class 8 truck volume set a 26-year low in February as U.S. manufacturers and their dealers sold only 6,236 heavy-duty vehicles.
The sales total last month was 39% lower than the anemic sales recorded in the same month last year, according to data from WardsAuto.com.
So far this year, customers have purchased 13,610 heavy-duty trucks, down 31.4% from 2008. The two-month total last year was down 43.4% from 2007.
“January and February were truly awful across the board, in truck sales, parts, service,” Kyle Treadway, chairman of American Truck Dealers and owner of 18 Kenworth truck dealerships in seven states, told Transport Topics. “It’s the slowest market we’ve seen since the ’80s.”
Paul Zajac, manager of industry data for WardsAuto.com, said the February figure was the lowest on record since February 1983, when 4,624 units were sold.
“February’s sales number is substantially below replacement de-mand volumes, as fleets are re-sponding to steep decreases in freight volumes and weak profits by reducing capital expenditures in order to improve cash flow and to rationalize capacity,” Chris Brady, president of Commercial Motor Vehicle Consulting, told TT.
“This is not a good sign for the industry,” said Eric Starks, president of FTR Associates, a consulting firm in Nashville, Ind. “With a further decline in February, this . . . suggests that the underlying fundamentals are working their way through the system, and we should expect to see low sales volumes for the foreseeable future.”
Manufacturers sold 133,473 Class 8s last year, a drop from 150,965, the total for 2007.
Starks said sales for the entire year may reach only 75,000 this year, previously the “most pessimistic case that we have been presenting to our customers.”
Navistar Inc.’s International Trucks sold the most Class 8s of any single brand in February, at 1,729 vehicles, yielding a 27.7% market share. Navistar’s total, however, was a drop from its January sales of 2,111 units.
“No matter how great commercial trucks are built, they do wear out, so this has to end sometime,” Navistar spokesman Roy Wiley said of the current industrywide slump.
All OEMs had sales figures significantly lower than a year ago, according to WardsAuto.com.
While International’s performance was the strongest, its sales represented a decline of 23% from February 2008. Freightliner Trucks, a subsidiary of Daimler Trucks North America, sold 1,335 trucks, a 45.6% decline from last February, for 21.4% of the market, Ward’s reported.
Peterbilt Motors Co., a unit of Paccar Inc., sold 837 Class 8s for 13.4% market share, which was down 29.1% from last year. Its Paccar stablemate, Kenworth Truck Co., sold 775 trucks for 12.4% of the market, down 43.8% from last year.
Volvo Trucks North America sold 745 tractors for an 11.9% market share but down 50% from last February. Sister company Mack Trucks Inc. sold 453 units for 7.3% of the market, down 46.6%.
DTNA’s Sterling brand, which is scheduled to end production later this month, sold 312 units for 5% of the market, while the Western Star brand sold 46 trucks, for 0.7% of the market.
All truck makers other than Navistar declined comment for this story.
For the first two months of 2009, DTNA’s three brands held 34.2% of the market for top position. Navistar was in second place with 28.2%; Paccar’s two brands, Peterbilt and Kenworth, placed third, with 3,007 sales and 22.1% of the market; and Volvo AB’s two brands, Volvo and Mack, were in fourth place with 2,098 sales and 15.4% market share.
“Originally, we had forecast a bump in sales this year because of the new emissions [standards] coming out in 2010, but after seeing sales the first two months, I’m guessing that it’s going to be flat this year,” said Diane Elnick, Ward’s industry analyst.
However, dealers said there may be slightly better times on the horizon.
Rip Nichols, who is the owner of a Freightliner-Western Star dealership in Evansville, Ind., said some companies and municipal fleets were anticipating buying trucks for projects expected to be funded by the federal economic stimulus program.
“We are seeing a slight uptick in activity in March,” said Treadway, who is based in Salt Lake City. “It’s by no means a flood of activity, but we’re quoting more since last fall and selling more than last year.”
