May Truck Sales Fall 51%
OEMs Cite Weak Recovery From ’06 Pre-Buy
By Frederick Kiel, Transport Topics
This story appears in the June 18 print edition of Transport Topics.
Heavy-duty retail truck sales in the United States fell 51.7% in May from year-ago levels, the result of slowing freight demand and the impact of last year’s massive pre-buy.
Sales totaled 12,154, down from the 25,149 units sold during May 2006, Ward’s Communications reported. This represents the largest year-over-year decline ever, according to analysts and Transport Topics’ research, and followed a 45% plunge in April that was the steepest drop in six years.
“The recovery from last year’s large pre-buy is not moving as fast as we anticipated,” Roy Wiley, spokesman for International Truck and Engine Corp., told Transport Topics.
Through the first five months of 2007, truck makers sold 76,643 Class 8s — a drop of 33.3% compared with the 114,969 sold during the same period in 2006.
To avoid buying the more expensive trucks with 2007 engines equipped to meet that year’s stricter U.S. emission-control mandates, many fleets made large pre-buys of 2006 vehicles, producing a record year of 284,008 unit sales.
“As expected, coming out of the massive pre-buy, demand for heavy-duty trucks continues to be weak,” John Walsh, spokesman for Mack Trucks, told TT.
“With the market already saturated with . . . [trucks meeting the old emission standards], many customers simply do not need new trucks right now,” Walsh said. “Lower levels of freight demand over the past couple of quarters . . . have also contributed to reduced demand.”
May’s sales total was the lowest thus far in 2007, and weakest since February 2004, when sales were just beginning to rebound from a slump following the implementation of earlier engine emission rule changes in October 2002 (3-22-04, p. 3).
Chris Brady, president of Commercial Motor Vehicle Consulting, said truck makers may begin to see a rebound toward the end of the summer.
“What happened is the fleets had a much greater-than-normal capacity towards the end of 2006 because of the huge pre-buy, just when freight volume got very soft,” Brady told TT. “Retail sales have been weak because fleets with excess capacity weren’t ordering trucks.”
However, Brady said several factors — including a recent increase in industrial production — are leading to a pickup in freight demand and a reduction in excess capacity.
“The upturn in fleet utilization has been so strong that . . . [fleets] have less and less room on their trucks, and that will drive truck sales,” he said.
Wards reported that industry-leading Freightliner Trucks sold 2,426 Class 8s in May, bringing its total for 2007 to 22,390, a market share of 29.2%. Freightliner was the top seller in 2006 with a 28.5% market share.
Freightliner LLC — parent of Freightliner Trucks, Sterling Trucks and Western Star Trucks — declined comment on May’s figures.
Following Freightliner was International, which sold 2,315 vehicles in May.
“We were happy to increase our market share to 19%,” Wiley said. “We’ve hit 19% or 20% market share a few times in the past couple of years, and our goal is to get there for the entire year.”
International has sold 13,736 Class 8s this year for a 17.9% market share, slightly less than its 18.7% share in 2006.
Peterbilt sold 1,824 trucks for a 15% market share, while Kenworth sold 1,754 for 14.4%. For the year, Peterbilt has sold 9,269 trucks and Kenworth 9,205. Both companies, which are subsidiaries of Paccar Inc., declined comment.
Mack Trucks sold 1,132 heavy-duty trucks in May for a 9.3% market share. Mack sold 6,352 trucks through the first five months of 2007 for an overall market share of 8.3%, down from 2006’s 10.7%.
Volvo Trucks North America, a sister of Mack, sold 810 trucks in May, bringing its year-to-date total to 7,657. Volvo’s market share of 10% thus far in 2007 is down from 11% the same period in 2006.
Volvo spokesman Jim McNamara said that the truck maker has sold all trucks containing 2006 engines and “is shipping U.S. ’07-engine trucks exclusively now.”
McNamara said he expects sales to rise, because “our customers will be pleased with the U.S. ’07 trucks and their engines as they gain experience with them.”
Peter Nesvold, transportation analyst for Bear, Stearns & Co., said in a June 12 newsletter that new truck orders in May were 15,100, based on data from A.C.T. Research, a larger figure than Bear Stearns’ forecast of 10,000 to 12,000 new truck orders.
Brady said delivery dates for May orders could range from as soon as a month to sometime in 2008.
“Nonetheless, the orders are another sign that truckers are seeking more capacity,” Brady said. “In my view, retail sales will start picking up in maybe late July, early August.”
This story appears in the June 18 print edition of Transport Topics.
Heavy-duty retail truck sales in the United States fell 51.7% in May from year-ago levels, the result of slowing freight demand and the impact of last year’s massive pre-buy.
Sales totaled 12,154, down from the 25,149 units sold during May 2006, Ward’s Communications reported. This represents the largest year-over-year decline ever, according to analysts and Transport Topics’ research, and followed a 45% plunge in April that was the steepest drop in six years.
“The recovery from last year’s large pre-buy is not moving as fast as we anticipated,” Roy Wiley, spokesman for International Truck and Engine Corp., told Transport Topics.
Through the first five months of 2007, truck makers sold 76,643 Class 8s — a drop of 33.3% compared with the 114,969 sold during the same period in 2006.
To avoid buying the more expensive trucks with 2007 engines equipped to meet that year’s stricter U.S. emission-control mandates, many fleets made large pre-buys of 2006 vehicles, producing a record year of 284,008 unit sales.
“As expected, coming out of the massive pre-buy, demand for heavy-duty trucks continues to be weak,” John Walsh, spokesman for Mack Trucks, told TT.
“With the market already saturated with . . . [trucks meeting the old emission standards], many customers simply do not need new trucks right now,” Walsh said. “Lower levels of freight demand over the past couple of quarters . . . have also contributed to reduced demand.”
May’s sales total was the lowest thus far in 2007, and weakest since February 2004, when sales were just beginning to rebound from a slump following the implementation of earlier engine emission rule changes in October 2002 (3-22-04, p. 3).
Chris Brady, president of Commercial Motor Vehicle Consulting, said truck makers may begin to see a rebound toward the end of the summer.
“What happened is the fleets had a much greater-than-normal capacity towards the end of 2006 because of the huge pre-buy, just when freight volume got very soft,” Brady told TT. “Retail sales have been weak because fleets with excess capacity weren’t ordering trucks.”
However, Brady said several factors — including a recent increase in industrial production — are leading to a pickup in freight demand and a reduction in excess capacity.
“The upturn in fleet utilization has been so strong that . . . [fleets] have less and less room on their trucks, and that will drive truck sales,” he said.
Wards reported that industry-leading Freightliner Trucks sold 2,426 Class 8s in May, bringing its total for 2007 to 22,390, a market share of 29.2%. Freightliner was the top seller in 2006 with a 28.5% market share.
Freightliner LLC — parent of Freightliner Trucks, Sterling Trucks and Western Star Trucks — declined comment on May’s figures.
Following Freightliner was International, which sold 2,315 vehicles in May.
“We were happy to increase our market share to 19%,” Wiley said. “We’ve hit 19% or 20% market share a few times in the past couple of years, and our goal is to get there for the entire year.”
International has sold 13,736 Class 8s this year for a 17.9% market share, slightly less than its 18.7% share in 2006.
Peterbilt sold 1,824 trucks for a 15% market share, while Kenworth sold 1,754 for 14.4%. For the year, Peterbilt has sold 9,269 trucks and Kenworth 9,205. Both companies, which are subsidiaries of Paccar Inc., declined comment.
Mack Trucks sold 1,132 heavy-duty trucks in May for a 9.3% market share. Mack sold 6,352 trucks through the first five months of 2007 for an overall market share of 8.3%, down from 2006’s 10.7%.
Volvo Trucks North America, a sister of Mack, sold 810 trucks in May, bringing its year-to-date total to 7,657. Volvo’s market share of 10% thus far in 2007 is down from 11% the same period in 2006.
Volvo spokesman Jim McNamara said that the truck maker has sold all trucks containing 2006 engines and “is shipping U.S. ’07-engine trucks exclusively now.”
McNamara said he expects sales to rise, because “our customers will be pleased with the U.S. ’07 trucks and their engines as they gain experience with them.”
Peter Nesvold, transportation analyst for Bear, Stearns & Co., said in a June 12 newsletter that new truck orders in May were 15,100, based on data from A.C.T. Research, a larger figure than Bear Stearns’ forecast of 10,000 to 12,000 new truck orders.
Brady said delivery dates for May orders could range from as soon as a month to sometime in 2008.
“Nonetheless, the orders are another sign that truckers are seeking more capacity,” Brady said. “In my view, retail sales will start picking up in maybe late July, early August.”
