November Truck Sales Rise 8.5%

This story appears in the Dec. 20 & 27 print edition of Transport Topics.

Heavy-duty retail truck sales in the United States increased 8.5% in November from a year earlier to 9,614 units, the 11th consecutive monthly gain, according to Wardsauto.com.

For the year, manufacturers have now sold 95,410 Class 8 trucks, or 14.6% more than in the comparable period of 2009, Wards said Dec. 10.

A separate research report suggested that demand for new trucks will accelerate sharply in coming years.

“The industry has done extremely well,” said Ronald Remp, owner of Wheeling Truck Center, a Volvo dealership in Wheeling W.Va.

Wards said the November sales total marks a pickup for overall Class 8 sales after a comparatively slow October. In that month, truck sales hit 8,714, only 2.5% higher than October 2009.

Remp said the biggest truck buyers are all flocking to the new-truck market, as the supply of late-model used trucks in the United States is “almost non-existent.”

Large fleets, as is typical in the early stages of an economic rebound, are driving demand for new equipment, dealers said.

“The fleet business has been good,” said Jim Hartman, owner of Kenworth dealership Truck Enterprises, Harrisonburg, Va. “We had good fleet deliveries this November.”

Hartman added that some seasonal factors, including fleets seeking fourth-quarter truck deliveries for tax purposes, also helped boost truck sales in November.

Kyle Treadway, president of Kenworth Sales Co., said while large fleets are indeed active in the new-equipment market, “they’re only buying what the absolutely have to.”

“We are seeing large fleets that have finally had to bite the bullet and replace equipment,” Treadway said Dec. 16. Some of these carriers are “not growing their fleets — they’re still shrinking, but they have to replace equipment.”

Meanwhile, a report released last week by ACT Research Co. indicated that manufacturers will stay busy in 2011 and beyond, with Class 8 demand forecast to continue the ramp-up that began this year and drive 2012 production to more than 300,000 units.

That means 2012 could potentially resemble the record year of 2006, when 284,008 Class 8 vehicles were sold, according to Wards.

However, one dealer questioned whether business from smaller fleets and other non-bulk buyers would be strong enough by 2012 to support ACT’s projected level of demand.

“If you’re talking 300,000 trucks, that means everyone’s buying,” and not only “the big fleets,” which have lately been driving demand, said Jack McDevitt, a Mack dealer based in Manchester, N.H.

The bulk of McDevitt’s customers are small fleets with several hundred tractors or fewer.

McDevitt said that there was at least one incentive in place for fleets to continue — or perhaps even expand — equipment purchases in the coming year: 2010 emission-control technology.

McDevitt said that the selective catalytic reduction system used in 2010 Macks has improved fuel economy by 0.5 mpg to 1 mpg, compared with older models.

“Believe it or not, we’ve got customers coming in that are ordering trucks right away, and they’re walking past non-SCR trucks because they want the fuel benefits,” McDevitt said. “I’m very pleasantly surprised. Before, I saw [SCR] as a major liability. Now my regret is that I didn’t order more of them for fourth-quarter delivery.”

All truck and engine makers are using SCR, except for Navistar Inc., which used a new version of exhaust-gas recirculation in its 2010 trucks. Navistar, maker of International brand trucks, was the only manufacturer for which sales declined in November, according to Wards.

Navistar said that the latest sales decline was not unforeseen by the company.

Navistar, Warrenville, Ill., had expected to sell off its inventory of 2009 model-year trucks in the first half of 2010 and take a market-share hit later in the year, a spokesman explained.

“We’ve said all along that our heavy Class 8 market share would be going down in the fourth quarter because of our build-and-hold strategy,” said Roy Wiley, Navistar’s manager of external communications. “There’s nothing really surprising here to us.

Despite falling in the past two months, Navistar sales for the first 11 months of 2010 are second overall among North American truck makers, trailing only Freightliner.

Wiley said that was a signal of “increased consumer and truck-owner demand for our EGR strategy.”

ACT, in its latest commercial vehicle outlook, projected that OEMs will produce a total of about 152,000 Class 8 trucks for 2010 — 29% more than in 2009, which was the worst year for truck sales in more than 20 years.

“While headwinds make a full-blown economic recovery unlikely before 2012, recent trends in the transportation and commercial vehicle markets point toward demand for new vehicles building throughout 2011 and 2012,” said Kenny Vieth, president of ACT Research.