July Truck Sales Up 22.5%

This story appears in the Aug. 18 print edition of Transport Topics.

U.S. retail sales of heavy-duty trucks jumped 22.5% in July to 18,793 units from a year ago, marking the first back-to-back monthly percentage gains above 20% in more than two years, WardsAuto.com reported.

The total was second-highest this year, trailing June’s 19,373, which  was the third-highest since 2006 and a 21.6% year-over-year increase.

July marked the fourth-highest monthly sales total since that boom year, and the year-over-year increase was second-highest this year behind March’s 25.6% gain.

Year-to-date, sales are up 15.1% over the same period last year at 118,583 big rigs, the highest through July since 2006, according to Ward’s.

An analyst said sales are likely to remain strong.

“We’re not that far into a real recovery in trucks and are going to see continued strength into next year,” said Lawrence De Maria, co-group head of global industrial infrastructure with William Blair & Co. in New York.

“We remain highly optimistic on the North American truck story,” he told Transport Topics. “It’s driven by real fundamentals, such as replacement demand, economic strength and replacing older, less efficient trucks that have higher maintenance costs with newer, more efficient, more fuel-friendly trucks.”

Five of the six major original equipment manufacturers saw year-to-year gains of at least 20% in their July sales.

Daimler Trucks North America sold 6,451 of its Freightliner brand trucks, a 22.6% increase. Freightliner held the top spot in market share despite slipping to 34.3% from 36.6% in June.

“DTNA continues to be pleased with the increased Class 8 sales levels,” said David Hames, general manager of marketing and strategy. “We believe that the strong industry backlog and order levels will continue to drive this sales trend for 2014.”

Sales of Daimler’s niche Western Star brand slipped 15% to 221 units.

Navistar Inc. sold 3,088 trucks, a 28.6% jump, and its market share for July rose to No. 2 among individual brands, from third in June.

Share improved to 16.4% from 14.6%, and the figures “show that Navistar is starting to get back some of its market share that it lost over the past few years,” De Maria said.

Navistar’s market share has averaged 15.4% through July, up from 14.5% in the first seven months of last year.

Bill Kozek, Navistar’s president of North American truck and parts business, called July “a solid month with economic indicators pointing in the right direction for strong retail sales to continue throughout 2014.

“Customers are gaining confidence in the economy, and as a result they are continuing to replace the aging North American truck fleet with new fuel-efficient truck technologies. Every percent of fuel-economy improvement equates to savings,” Kozek told TT.

Volvo Group sister companies Volvo Trucks and Mack Trucks sold similar numbers of trucks — 1,930 and 1,873, respectively — although Volvo’s sales declined 4.1%, and Mack’s jumped 51% from a year earlier. Each held about 10% market share.

“Industry sales continue to rise as customer confidence in the economy continues to improve,” said Magnus Koeck, Volvo Trucks’ vice president of marketing and brand management.

“The ongoing need to replace aging vehicles, along with increased freight demand, remains a factor.”

Mack Vice President of Marketing John Walsh said, “Fleets continue to invest in new trucks to meet rising freight demand. Increased confidence in the economy spurring job creation the past several months, as well as increased performance in the manufacturing sector, are contributing to increased sales.”

Paccar Inc.’s Kenworth and Peterbilt brands’ sales rose 28.9% and 21.9% to 2,698 and 2,520 units, respectively. Kenworth’s market share dipped to 14.4% from 14.6% in June, lowering it to third among brands, while Peterbilt’s rose slightly to 13.4%, as it held the fourth spot.

Spokesmen for Kenworth and Peterbilt declined comment last week.

July’s sales increase came in tandem with a 70% surge in truck orders, marking the strongest July on record, according to ACT Research Co.

De Maria said that overall Class 8 “backlogs are building, based on the strength of the orders we’re seeing. We’re looking at a relatively steady cadence of deliveries into next year,” he told TT.

“A lot of fleets have placed orders over a planning cycle that extends beyond the near term. So that would lead us to believe that there’s going to be continued strength into next year,” he said. “We’re still seeing orders that are exceeding expectations at a time of year that is typically a weak period.”