Medium-Duty Truck Sales Soar in July

This story appears in the Aug. 23 print edition of Transport Topics.

U.S. retail sales of medium-duty trucks — Classes 3-7 — jumped 54.5% in July from the corresponding month a year ago, the largest year-over-year gain since mid-2005 and the biggest sales month this year, WardsAuto.com reported.

Medium-duty sales were 24,586 units in July, and the total sold this year through July was 148,103, a 23.9% increase from the same 2009 period, Ward’s said.

The year-over-year gain was the biggest since July 2005, when sales grew 54.8% from the previous July.

The biggest gain in the new report was in Class 3, which more than doubled from 2009. Class 5 sales increased more than 75%, while Class 6 trucks had a 20.5% sales gain.

On the other hand, sales of Class 4 trucks dropped 61.7%, while Class 7 sales slipped 0.9%.

“We have been noticing . . . what is more than a subtle shift in gross vehicle weight, down the scale, with Class 5 . . . and Class 6 taking away from Class 7,” Steve Tam, vice president of the commercial vehicle sector at ACT Research Co., Columbus, Ind., told Transport Topics.

Through the first seven months of this year, Class 7 sales are down 4.6%, while Class 6 sales are up 46.4% and Class 5s are up 16.3%.

Tam said that ACT Research, publisher of commercial vehicle industry data, ascribed the change to “common sense” by vehicle buyers.

“When the economy was good, people were buying trucks as big and macho as they could, so that you’d see landscape companies hauling a lawn mower in a Class 6 or 7 truck, totally beyond what they needed,” Tam said. “With the economy what it is now, companies are downsizing, or what we call ‘right-sizing,’ their truck purchases to models that are both less expensive to purchase and also cheaper to operate, both in fuel and maintenance.”

Jonathan Starks, transportation analyst at FTR Associates, Nashville, Ind., said that just as many Class 3s were sold for private use as for commercial purposes.

“The traditional auto makers have the overwhelming market share in Class 3, and sales are driven more by incentives, such as rebates, rather than business needs,” Starks said.

He said that sales in Classes 6 and 7 were still below what would be replacement rates in “normal” times.

“Things are sluggish and will be sluggish for a while longer,” Starks told TT. “We’re seeing sales for Class 6 and 7 vehicles running between 2,000 and 3,000 a month, when 4,000 to 5,000 would be more of a break-even range, so there is still plenty of room to make up.”

He said that construction was a big driver of purchases in Classes 6-7.

“Public-sector construction has been strong and is still going pretty well, but it doesn’t make up enough of the business to compensate for private construction, both commercial and residential, both still very weak,” Starks said.

He added that FTR expected “a lull” in medium-duty sales over the “next couple of quarters.”

“We still believe that the national economy is growing and will continue to grow, but after the string of recent bad economic news, it’s going to take a while to jump-start strong growth again,” Starks said. “Orders are likely to be pretty spotty the rest of this year, with a strong recovery not coming until 2011 or even 2012.”

Sales have risen each month in 2010 over the comparable months last year, Ward’s said.

Daimler Trucks North America was the leader in Class 7 sales in July, selling a total of 1,788 trucks, with 1,782 of them carrying its Freightliner brand.

Navistar Inc. was in second place with 752 International trucks sold, while Paccar Inc. was in third with 326 Class 7s sold, 178 by Kenworth Truck Co. and 148 by Peterbilt Motors Co. Ford Motor Co. was in fourth place with 124 sales.

Navistar ranked first in Class 6 sales, with 730 trucks sold, while Daimler was second with 711, mostly Freightliners. Ford was third in Class 6 sales with 562 vehicles sold and Paccar fourth with 75.

Ford was on top in Class 5 in July with 1,741 trucks sold, Chrysler Group was next with 864 sales, followed by Isuzu at 247 vehicles and Navistar at 180.

“Class 7 is down because a lot of them go into heavy-duty vocational work such as construction and garbage hauling, which are down,” Navistar spokesman Roy Wiley told TT.

“Class 6 is more of the urban pickup-and-delivery market, where business has been better,” Wiley added. “We expect our share will rise in Class 6 this year.”

DTNA also ranked first in Class 7 sales in 2010 to date, with 8,770 vehicles sold. Navistar placed second at 8,129 and Paccar was next with 2,114 sales.

In Class 6, Navistar was in first for the year with 9,138 sales, followed by DTNA at 4,091.

The July sales total also was the highest absolute number of medium-duty trucks sold in any month this year, Ward’s data showed.