May Class 8 Truck Sales Drop 39%
This story appears in the June 22 print edition of Transport Topics.
Heavy-duty U.S. truck sales continued their severe slide into a fifth month, as retail volume fell 39% in May, while the year-to-date total now lags the pace of last year by 33.9%, according to WardsAuto.com.
And manufacturer order boards for new trucks remain lightly populated, essentially killing off a once-commonly held theory that there might be a small-scale pre-buy ahead of the Jan. 1 change in federal emission rules.
Separately, ACT Research Co., Columbus, Ind., said June 15 that an analysis of orders and other factors led it to predict that heavy-duty truck sales would fall 43% this year from their 2008 level. While the company predicted some growth in 2010, ACT researchers estimated sales next year also would fall below 2008, which was generally considered a poor year, with Ward’s reporting 133,473 Class 8 trucks sold.
Original equipment manufacturers and their dealers sold 6,955 Class 8 vehicles in May, down from 11,400 in May 2008. For the first five months this year, sales have totaled 35,451 trucks, down from 53,631 last year, Ward’s said in its June 10 survey.
“We’ve seen some increased activity in terms of people coming in for quotes, but they’re slow on closing deals,” said James Hartman, whose Truck Enterprises Inc. dealership in Harrisonburg, Va., sells Kenworth and Volvo trucks.
“Tonnage to be hauled is down, the cost of trucks is high and credit is tough,” said Navistar Inc. spokesman Roy Wiley. “The market is weak, and our order boards are weak. It’s tough times out there and no sign of a pickup yet,” he said.
Focusing on the dearth of truck freight, said Kenny Vieth of ACT, “There’s still significant excess capacity.” Other factors are putting a damper on sales, too.
“There is less ability by buyers to execute a trade for a new vehicle [because of low trade-in values for their old equipment]. That makes it more expensive to do a deal. So overcapacity, plus lower margins, plus lower used truck prices means that 2010 doesn’t start strong, but it should end strong,” said Vieth, an ACT partner and senior analyst.
Navistar’s Wiley and Vieth said separately that the idea of a modest pre-buy ahead of tightened federal emissions rules for 2010 once made sense, but it has not come to pass.
“We see sustained weakness with low volumes,” Vieth said. His firm’s forecast called for sales of 118,000 Class 8s in North America, including 93,000 in the United States. It would be the lowest level, he said, since 1991, when U.S. sales dropped to 99,100 units.
Hartman, the Virginia-based Volvo-Kenworth dealer, said he is not booking orders yet, but he has some confidence there will be modest improvement during the second half of the year. Hartman said customers have said that they understand this is a good time to “take advantage of the competitive environment.”
The Ward’s report said Navistar’s International brand had the largest market share for May and for the year to date. The Warrenville, Ill., OEM sold 2,001 big trucks in May, a 24% decline from the 2,633 sold a year ago. Cumulative sales hit 10,080, a 19.6% decline, year-over-year.
By doing less poorly than its competitors, Navistar boosted its five-month market share to 28.4% from 23.4% last year at this time.
Freightliner Trucks, the flagship brand of Daimler Trucks North America, finished second, moving 1,879 units, a 30.6% decline from the 2,708 it sold in May 2008. Year-to-date sales fell 26.3% to 9,809 heavy vehicles.
The two OEMs belonging to Paccar Inc. came in third and fourth, with Peterbilt Motors edging out Kenworth Trucks.
Peterbilt sold 860 Class 8s, down 41.7% from the 1,474 it sold in May 2008. The cumulative volume dropped 39.5% to 4,097 units.
Kenworth moved 799 big trucks in May, a 42.8% decline to 1,396 units. Its five-month total was 3,900 Class 8s, a 41.7% fall-off.
Volvo AB’s two U.S. OEMs — Mack Trucks and Volvo Trucks North America — took fifth and sixth place.
Mack sold 593 big trucks for the month, down 47.4% year-over-year from 1,127 units. The cumulative volume fell 47% to 2,494 Class 8s.
VTNA moved 512 units, a 60.2% decline from the 1,286 it sold in May 2008. Year-to-date volume has fallen 48.9% to 3,054 big trucks.
Daimler’s two smaller U.S. brands — Sterling and Western Star Trucks — completed the roster.
Sterling’s monthly sales plunged 57.9% to 272 units from 646 in May 2008. Its year-to-date volume has fallen 44.2% to 1,702 Class 8s. In March, the company manufactured its last new truck.
Western Star suffered the sharpest monthly drop-off, 68.3%, selling just 39 units, compared with 123 during the May before. Through May 31, the company sold 306 heavy trucks, a 40.7% fall off from the year before.
