March Truck Sales Dip 2.9%, Reflect Ongoing Slowdown
This story appears in the April 18 print edition of Transport Topics.
U.S. retail sales of Class 8 trucks dipped by 2.9% in March from a year earlier to 20,034, WardsAuto.com reported.
Analysts said the results show a market slowdown after near-peak sales in 2015, the fourth-highest year.
“Going back a year ago, this market was never as strong as everybody thought,” Don Ake, vice president of commercial vehicles at research firm FTR, told Transport Topics.
“We had a case last year when supply and demand were not matched up very well,” he said, noting that supply always was greater because the original equipment manufacturers loaded up their dealer networks in anticipation of greater sales. “It didn’t work out that way.”
For the quarter, sales are down 7.1% to 51,859 trucks compared with 55,809 last year, Wards reported. Also, only two truck makers were in positive territory for the month and quarter: Freightliner Trucks and Mack Trucks.
There was a 69-day supply of Class 8 trucks at the end of the first quarter, up from 57 days a year earlier. Total units in inventory rose to 50,869 from 47,182, Wards said.
ACT Research Co. forecasts sales will be off 18% for the year compared with 2015.
“So we are working our way down, so to speak,” said Steve Tam, ACT’s vice president of the commercial sector.
Ake added that the declining sales figures are what to expect a year after near-peak demand.
“The market on the retail side performed pretty normally,” he said. “It’s just the expectation.”
BB&T analyst Rhem Wood wrote in an investor note that the spread between new-truck prices and used-truck prices is getting larger.
“Looking forward, we expect the new-used spread to continue to widen in 2016 and maybe 2017, which could put additional pressure on the new Class 8 market,” he said.
As for individual truck makers, Freightliner, a unit of Daimler Trucks North America, saw March sales increase 26.4% to 8,562, good for a 42.7% market share.
For the quarter, Freightliner’s sales rose 2% to 21,964 and a 42.4% market share.
DTNA niche nameplate Western Star sold 475 trucks in March, up 16.7% and good for a 2.4% market share. For the quarter, it had sales of 1,199, up 12.6%, and earned a 2.3% market share.
Mack, a brand of the Volvo Group, posted a 9.4% gain to 1,918 trucks, and earned a 9.6% market share.
“March’s overall Class 8 retail sales continue to reflect stagnant freight levels as a result of inflated inventories across the economy,” said John Walsh, Mack’s vice president of marketing.
He added: “A strengthening construction sector, combined with a strong response to our durable, fully integrated products and solutions, fueled our positive results in March, as customers increasingly rely on Mack to help achieve their business goals by reducing total cost of ownership.”
Mack’s sales for the quarter reached 4,353, up 10.1%, and an 8.4% market share.
Meanwhile, Magnus Koeck, vice president of marketing for Volvo Trucks North America, said the OEM’s March retail sales “show the impacts from a recall of Volvo models manufactured with a two-piece steering shaft, and our decision to halt retailing affected trucks until a safe solution could be implemented.”
VTNA, also a unit of the Volvo Group, saw sales plunge 48.9% to 1,468 and a 7.3% market share.
In March, Volvo said it stopped delivery of any vehicles equipped with the component, including VNL, VNM and VNX models that were produced between May 11 of last year and March 2016 — 15,835 trucks in all.
“We will replace all the two-piece shafts with a one-piece shaft as soon as the parts are available.” Volvo spokesman John Mies said at the time.
Volvo’s quarterly sales were down 34.8% to 4,441 units, or an 8.6% market share.
International Truck, the brand of Navistar International Corp., saw sales skid 23.4% to 2,354 trucks year-over-year for an 11.8% market share.
International’s total for the quarter, compared with a year earlier, was down 9.5% to 6,458 trucks, good for a 12.5% market share.
Kenworth Truck Co.’s sales slipped 0.8% to 2,926, good for a 14.6% market share, and Peterbilt Motors Co. saw sales drop 16.7% to 2,327, giving it an 11.6% market share.
For the quarter, Kenworth’s sales were down 12.7% to 6,816 trucks, earning it a 13.1% market share. Peterbilt’s sales fell 11.7% to 6,620 for a 12.8% market share.
Kenworth and Peterbilt are divisions of Paccar Inc.
