February Truck Orders Up 4.2%
This story appears in the March. 11 print edition of Transport Topics.
Fleets ordered 23,300 Class 8 trucks in North America during February, 4.2% more than they had a year earlier, ending a string of 13 straight year-over-year declines, according to ACT Research.
The February total was the industry’s highest since January 2012, according to ACT’s preliminary figures, and was the fifth straight month of more than 20,000 orders.
On a sequential basis, February’s total was 5% higher than the 22,191 orders that were placed in January.
These gains took place despite the federal government’s debate over sequestration, the automatic federal spending cuts that began March 1 and that economists have warned are likely to stifle growth.
ACT Vice President Steve Tam said worries about sequestration did not have as much of a negative effect on order levels as the national election or the fiscal cliff concerns at the end of 2012.
“The direct impact there is going to hit the military community,” he said. “From an indirect impact or a psychological impact, it may be keeping a little bit of a cap on that number, but we’re so glad to be past the election and all that kind of stuff that they’re ready to get back into the pool and start ordering some trucks.”
Daimler Trucks North America, the maker of Freightliner and Western Star trucks, is “cautiously optimistic that new truck orders will continue to show strength unless there are any dramatic shocks to the system,” said David Hames, the company’s general manager of marketing and strategy.
In its latest earnings report, Navistar International Corp. said it received 7,700 orders for its Class 8 trucks in the U.S. and Canada during its first quarter ended Jan. 31. That was down 36% from 12,100 in the same three months a year earlier.
Orders of Class 8 heavy-duty trucks declined 28% to 5,800, while Class 8 severe-service trucks fell 53% to 1,900, the company said.
Navistar is transitioning its engine technology from exhaust gas recirculation to selective catalytic reduction to meet U.S. Environmental Protection Agency emissions standards. The firm’s EGR engines failed to meet federal standards, which has sharply cut sales.
In December, Navistar began shipping its ProStar Plus model with the Cummins ISX 15 SCR engine.
“We have built 1,035 ordered units, and we have about 2,200 more orders in queue to build,” said chief operating officer Troy Clarke, who will take the reins as CEO on April 15.
The company also said it plans to begin shipping trucks with its own 13-liter SCR engines on April 30.
Other truck manufacturers did not respond to requests for comment.
ACT’s Tam estimated that February’s order intake boosted manufacturers’ backlogs by about 3,000 units, pushing the industry’s total backlog above the 80,000 mark.
Despite the year-over-year net orders gain in February, ACT still projects that full-year 2013 North American truck production will be 264,300, down 5.2% from the 278,700 trucks built last year.
Analyst Ann Duignan of J.P. Morgan Chase said that, if the trailing three-month run rate for new orders were to continue, it would suggest production of 266,000 Class 8 trucks in 2013.
