Truck Sales Decline 7.4%, But OEMs Project End to Slump

This story appears in the May 20 print edition of Transport Topics.

U.S. retail heavy-duty truck sales declined by 7.4% in April, the eighth straight month of year-over-year contraction, WardsAuto.com reported.

Fleets and owner-operators bought 15,646 new trucks last month, down from 16,905 in April 2012. The four-month cumulative volume was 54,451 vehicles, a 14.6% drop from the 63,750 units sold in the year-ago period, Ward’s said.

Original equipment manufacturers remained confident the slump will dissipate soon, and growth will take root during the second half of this year.

A key point for that is that April orders for new North American trucks hit their highest level in 15 months.

“The forecast we made for the year continues to play out with the first half of this year slightly below last year’s level, and we expect the second half of the year to be better than the first half,” said Jack Allen, chief operating officer of Navistar International Corp.

“As expected, the beginning of 2013 has been consistently slow. However, we remain optimistic that small monthly increases will give way to a more robust second half, largely driven by replacement demand,” said Magnus Koeck, vice president of marketing for Volvo Trucks.

Daimler Trucks North America is the only one of the four major heavy-duty truck corporations to post sales gains this year at both Freightliner and Western Star Trucks. General Manager David Hames said that growth can be traced back to the fall.

“DTNA is beginning to see the impact of the solid order levels that began in October 2012 on retail sales,” said Hames, who characterized the current heavy-duty market as “challenging.”

“We’re seeing a lot of activity now,” said Robert Nuss, CEO of truck dealer Nuss Truck & Equipment in Rochester, Minn. “There’s some fleet business for over-the-road tractors, some construction vehicles and private fleets for grocers are adding.”

Nuss also sells construction equipment at his seven locations and said that not only are interest rates low, but lenders are more willing to underwrite purchases.

“The credit policies have eased up a bit,” Nuss said.

Motor Power Equipment sells Kenworth Trucks in Billings, Mont., and sales manager Dave Hardy said its fleet business has not recovered from the 2008-2009 recession, but overall volumes are good because of oil and gas exploration.

Small fleets in Montana and neighboring areas used to buy tractors in 4-year cycles, but that has not come back, he said.

Instead, Hardy said he is selling T800s and W900s to oil-field companies that batter the vehicles on gravel roads and trade them in after two or three years.

Among individual brands, Freightliner kept first place for the month, selling 5,863 big trucks, a 15.1% improvement over 5,092 in April 2012. Year-to-date volume rose 8.7% to 22,198 vehicles.

Sales for Navistar’s International brand fell hardest for the month, by 31.4%, to 2,345 heavy trucks from 3,420. Cumulative volume fell 35.5% to 8,073 units.

The two Paccar Inc. units took third and fourth places and reported declines.

Kenworth monthly sales fell 19.2% to 2,137 Class 8s from 2,644. The four-month tally dropped 27.7% to 6,852 vehicles.

Peterbilt Motors sales diminished by 19.6% to 2,033 big trucks from 2,530. Year-to-date, the falloff was 20.4% to 7,113 vehicles.

Both Kenworth and Peterbilt declined to comment.

Volvo grew for the month but is still down for this year. April sales expanded by 7.1% to 1,689 heavy trucks from 1,577, while the cumulative volume is off 22.8% to 5,102 units.

Mack Trucks, also a part of Volvo Group, sold 1,310 Class 8s, down 11.4% from 1,479 the previous April. Cumulative volume is down 19.6% to 4,072 vehicles.

“We at Mack have been saying all along that we expected 2013 to get off to a relatively slow start but pick up moving through the second half of the year,” Mack Vice President John Walsh said. “We continue to believe this will be the case based on the uptick in orders that the industry is experiencing.”

Western Star sales shot up 61.3% to 263 heavy trucks from 163. Four-month volume is up 38.4% to 1,028 trucks.