February Class 8 Orders Rise 12%

February orders for new Class 8s gained 12% from a year earlier and were 20% above an eight-year low in January, research firm FTR Associates reported last week.

However, FTR said, net orders remained below the monthly average last year. “Orders came in as expected. They’re still very, very low,” Eric Starks, president of FTR, said on March 10.

Meanwhile, ACT Research said its latest market data showed that demand for new trucks will begin to recover in the second half of the year and accelerate next year, while the world’s largest truck producer, Daimler AG, said the worst may be over.

FTR said buyers placed 7,628 orders for new Class 8 trucks in February, topping the 6,372 orders in January and the 6,809 orders placed in February 2009.

It was only the second month-to-month improvement for truck orders since October, and the February figure was well below the 2009 monthly average of 10,000 units, according to preliminary order data compiled by FTR.

Nevertheless, ACT said March 11 it expects manufacturers to produce 19% more Class 8 trucks in the second half of 2010 than they did in the second half of 2009 as capacity tightens as freight demand grows.

In 2011, the company said, new-truck demand will jump 77% from projected 2010 levels.

ACT said truck makers in North America sold 59,327 Class 8 vehicles in the second half of 2009.

Andreas Renschler, head of Daimler’s global truck business, said March 10 that “the way our incoming orders are developing at present indicates that the global truck market has bottomed out.”

Renschler spoke at Daimler’s corporate headquarters in Stuttgart, Germany.

Other Daimler representatives and representatives for Paccar Inc., Volvo Trucks North America and Mack Trucks declined to comment.

At a recent industry event, Daimler Trucks North America officials said they had sold out their production slots through May and were expecting to soon have June sold out as well.

Navistar Inc., Warrenville, Ill., said in a March 10 conference call with investors that it had booked 6,200 orders in the first quarter of 2010, 15% more than in the 2009 quarter.

Roy Wiley, a Navistar spokesman, would not comment on orders booked in the current quarter. Asked about production levels at Navistar factories, Wiley said only that the company’s plant in Chatham, Ontario, which was idled in June, remains offline. All heavy truck orders are being filled by Navistar’s Escobar, Mexico, facility, Wiley said.

Most observers expressed caution about the strength and timing of the industry’s recovery.

FTR’s Starks said that the bump in orders last month was left over from the pre-buy that began in October, when buyers placed about 22,000 orders for trucks with engines made before stricter federal emissions standards went into effect Jan. 1.

All 2010 trucks will use emissions-control technology that adds $6,000 to $10,000 to new-truck prices, manufacturers have said.

“A good bounce in Class 8 demand [is] just not realistic with people now placing only 2010 engine orders,” Starks told Transport Topics.

Starks said that while truck makers in North America have filled their order slots, assembly lines at truck plants are not running at full capacity and production is more likely to be dialed down than ramped up in the coming months.

“Build slots, they’re full through the first quarter and the second quarter,” Starks said. “Could they ramp things up? It’s possible, but probably not likely.”

Starks warned that sunnier economic forecasts and signs that trucking capacity is inching back toward equilibrium have not yet led to a rush of buyers placing orders for more tractors.

“Our analysis continues to see a disconnect between the 2010 freight and equipment production outlooks,” Starks said.

At Daimler’s press event last week, Renschler stopped short of picking a date for the economic recovery that would eventually restore the demand for new trucks that the recession has sapped.

Daimler “remains cautious in its forecasts regarding future economic developments,” Renschler said. After the sharp sales downturn last year, “personnel reductions became unavoidable” in some of Daimler’s big markets, including the United States.

Meanwhile, even with carriers’ capacity poised to tighten, there were other signs that new truck demand could remain lackluster.

In a conference call earlier this month, consulting firm Transport Capital Partners said that truckload carriers it polled as recently as February planned to extend their equipment trade cycles, delaying purchases of new trucks.

About 35% percent of fleets said that they planned to stretch out equipment replacement cycles by a year — just below the number of fleets that said they would hold to their current equipment cycle. More than 15%, meanwhile, said that they would extend trade cycles by a year and a half.