October Truck Sales Skyrocket

Heavy-duty truck sales in the United States skyrocketed in October, doubling from the corresponding month last year, and with a 174.2% sales gain by Navistar Inc. leading to the industry’s greatest single-month volume since January 2007.

WardsAuto.com reported Nov. 10 that retail sales shot up 99.95% to 17,424 Class 8 trucks, from 8,714 the previous October. The year-to-date total rose 55.5% to 133,399 heavy trucks from 85,796 during the first 10 months of 2010.

In addition to Navistar’s surge, the two Paccar Inc. brands — Kenworth Trucks and Peterbilt Motors — also posted triple-digit sales gains. All seven major brands reported increases for the month and for the year so far.

The Class 8 tally for the first 10 months of 2011 is larger than the full-year results for 2009 and 2010 and only 74 trucks behind the annual figure for 2008. An executive of ACT Research Co., Columbus, Ind., said the October surge was unusual but that 17,000-truck sales months could well become typical in the near future.

“This is certainly not the norm,” ACT Vice President Steve Tam said. However, Tam also noted that vehicle sales often surge during a year’s final quarter because of favorable opportunities for claiming depreciation on tax returns. ACT estimated that U.S. truck sales will average about 17,800 vehicles a month next year.

Navistar spokesman Steve Schrier declined to comment on the company’s results, saying the numbers should “speak for themselves.”

Navistar sold 4,259 International trucks last month, compared with 1,553 a year earlier. Cumulative sales this year were up 24.9% to 28,918 units — the smallest rate of increase by any of the seven major brands for the year to date, according to Ward’s.

Navistar’s sales totals were the second largest for the month and year to date. Its sales surge coincides with the final month of Navistar’s 2011 fiscal year.

Year-end sales pushes are not uncommon in truck making, Tam said. “There are incentives in the industry related to management compensation and bonuses that are often linked to sales and production targets, and there are also market-share bragging rights.”

In previous years, Navistar managers have made a similar point, saying that November and December are tough months for Navistar sales as their competitors push sales at the end of their fiscal years, which, unlike Navistar’s, coincide with the calendar year.

Freightliner Trucks kept first place for the month and year to date.

The company, part of Daimler Trucks North America, sold 5,692 big trucks in October, an 82% jump from a year ago. Sales so far this year have risen 49.6% to 41,943 vehicles.

Western Star Trucks, DTNA’s brand for severe-service vehicles, rose 37.1% for the month to 181 Class 8s, from 132. It was the smallest rate of increase recorded for the month. Cumulative sales, meanwhile, rose 80.1% to 1,641 vehicles.

“We view year-to-date Class 8 results very positively, and expect to maintain current sales levels through the balance of the year,” said David Hames, DTNA’s general manager of marketing and strategy.

“We believe that the market is on track to approach a ‘normal’ sales year in 2012. Retail sales continue to be driven largely by fleet replacement needs, as carriers are not yet undertaking any significant growth initiatives,” Hames said.

Paccar’s brands took third and fourth places for October and the 10-month period. Peterbilt monthly sales doubled to 2,354 Class 8s from 1,177, while cumulative volume jumped 85% to 18,654 vehicles.

Kenworth monthly sales soared 104.7% to 1,990 units from 972 a year earlier. The year-to-date total rose 91.8% to 17,148 heavy trucks.

The Kenworth and Peterbilt general managers have said in recent interviews that their companies have been able to increase market share by more than 2 percentage points each because they have made “conquest” sales by appealing to fleet managers with aerodynamic tractors that get better fuel mileage (11-7, p. 31).

Volvo Group’s two North American brands, Volvo and Mack Trucks, took fifth and sixth places. Volvo’s monthly sales leaped 63.2% to 1,849 vehicles from 1,133. Cumulative sales rose 99.6% to 15,140 big trucks — the highest rate of increase for the year to date.

Mack’s monthly sales jumped 77.2% to 1,097 vehicles from 619. Its 10-month volume rose 50.5% to 9,938 big trucks.

New truck sales are expanding from large- and medium-size fleets to small carriers and even owner-operators, said David Thompson, CEO of TEC Equipment, Portland, Ore., a Volvo and Mack dealer with 15 outlets in western states.

“The small operators with two to four units are coming in,” said Thompson.

Thompson also said he is now willing to carry inventory again and sees commercial banks and other lenders competing against Volvo’s in-house finance arm to write loans.

“A year ago, we were selling some trucks based on the Port of Los Angeles, but we weren’t getting walk-in business off the street. My customers are making money and paying their bills on time,” said Thompson, adding that he now carries $25 million worth of tractors on his lots.

On the other side of the country, at the Baltimore-Potomac Truck Group, sales of Macks and Volvos “are doing very well,” sales manager Mike Gorsch said of the Linthicum, Md., company. “We haven’t doubled, but we’re holding our own.”

“Anyone hauling freight is seeing an increase in business. There has been a pent-up demand for trucks, and now many of these carriers really have to buy,” said Gorsch, whose company has six locations in Maryland and Virginia.