Truck Orders at 2013 Low, but Top Year Ago by 36.2%

This story appears in the Aug. 12 print edition of Transport Topics.

North American truck orders totaled 17,600 in July, the lowest tally this year but 36.2% higher than the same month in 2012, ACT Research reported.

Last month’s order intake was down 6.5% from the 18,831 orders placed in June. Though the year-over-year jump was the largest percentage gain in 21 months, that surge was more a reflection of weakness a year ago.

ACT President Kenny Vieth described the July total as a “satisfactory” number for that month, which is typically the weakest of the year.

“During the third quarter, we know from history that orders are going to be soft, so you can’t take them at face value,” he said.

ACT said the order intake represented the sixth straight month of year-over-year growth and that the July 2012 tally of 12,925 was the lowest since August 2010.

“The third quarter of last year was kind of the low spot from an economic visibility standpoint,” Vieth said. “Certainly, the economy today isn’t setting any records, but it has leveled out. . . . There’s this slow growth, as opposed to drags on what was already slow growth then.”

Through seven months, 2013 net orders were 149,723, up 13.1% from 132,331 in the same timeframe in 2012.

Another research firm, FTR Associates, reported a slightly lower estimate for July order activity, pegging the total at 17,307 net orders.

Eric Starks, FTR’s president, said orders were “generally in line with expectations,” given the normal softness during the summer  months.

David Hames, general manager of marketing and strategy at Daimler Trucks North America, said his company believes the downturn was “a result of the typical summer lag we have seen the past few years.”

“While we would like to see the consistent order activity of the first half of 2013 continue, we are optimistic about the 36% order increase over July 2012,” he said.

DTNA makes Freightliner and Western Star brand trucks.

Order intake at Navistar International Corp. has improved, said Bill Kozek, president of the company’s North American truck and parts business.

Navistar’s truck sales declined as the company worked to complete its transition to engines with selective catalytic reduction technology to meet federal emissions standards.

“We’re confident now that we’ve bottomed out on market share,” Kozek said, adding that he expects Navistar will be able to demonstrate improving market share by the end of the company’s fiscal year on Oct. 31.

He added, however, that many customers are still in a wait-and-see mode.

“Their business is good, they want to buy trucks, they need to buy trucks. But they also want to see what happens with the general economy,” Kozek said.

He said he recognizes that regulations — including hours of service — and the driver shortage are issues restraining commercial vehicle sales.

Other truck makers did not provide comment before Transport Topics’ deadline.

ACT’s Vieth said the industry had about 83,000 units of backlog at the end of June, down from 88,000 a year earlier.

Even so, manufacturers are in a better position now than they were a year ago, he said, because last year’s production rates were higher while incoming orders were weaker.

“This year, production and orders are a lot more closely aligned,” Vieth said.

More fleets are planning to order new Class 8 trucks in the months ahead, according to a recent survey conducted by CK Commercial Vehicle Research in late July.

The firm said that 65% of fleet executives who responded said they planned to place orders in the next three months, up from 53% of respondents in its second-quarter survey in April.

The estimated size of those orders declined from the previous quarter but jumped on year-over-year basis. In this year’s third-quarter survey, participants said they expect to place orders that amount to 6.1% of their inventories, compared with 1.4% of inventory for the 2012 respondents.

The firm said 48 fleets that operate more than 31,000 Class 8 trucks participated in the survey.

Associate News Editor Jonathan S. Reiskin contributed to this story.