Truck Sales Hit 8-Year High
This story appears in the Jan. 19 print edition of Transport Topics.
Heavy-duty truck sales surged in December to their highest level in eight years, putting an exclamation point on the best year for new equipment purchases since 2006, WardsAuto.com reported.
The 23,379 trucks sold in December were the most since the same month in 2006, when U.S. Class 8 retail sales crested at 26,462.
Last month’s total, a 19% year-over-year increase and a 40% jump from November, pushed the final 2014 sales tally to 220,405 units, up 19% from 184,784 in 2013.
“Obviously, 2014 was a very strong year,” said industry analyst Lawrence De Maria of William Blair & Co. “We’ve been waiting for a relatively sustained up-cycle for quite some time, and now the market finally has some serious momentum behind of it.”
The Class 8 industry has ridden a roller coaster of highs and lows in the past decade, peaking at 284,008 sales during the 2006 pre-buy ahead of tighter federal emission standards and then slumping during the recession, bottoming out at 94,798 in 2009. Since then, however, sales have generally been climbing, except for a minor pullback in 2013.
Sales rose steadily throughout 2014 on a year-over-year basis, with each monthly total surpassing its corresponding level in 2013.
De Maria said the sales growth has been driven by the strengthening economy and the replacement of aging vehicles.
The greater fuel efficiency of new trucks and the high residual values of used equipment also have played a key role in buyers’ decisions, he added.
“We expect the sustained momentum to continue into 2015,” De Maria said. “We should see truck sales increase nicely again.”
He said the recent drop in diesel prices will lower fleets’ operating costs and enable them to allocate more money toward fleet replenishment. Low fuel prices also could spur growth in consumer spending, resulting in greater freight demand, he said.
All of the major heavy-duty truck manufacturers posted double-digit sales gains in 2014, while market shares remained fairly static, according to Ward’s data.
Daimler Trucks North America’s Freightliner brand continued to lead the market with 78,467 Class 8 sales in 2014, a 16% increase. Its market share slipped to 35.6%, from 36.6%, but the brand easily held onto the top position.
“Freightliner Trucks, driven by the Freightliner Cascadia Evolution, the Detroit DD15 and the Detroit DT12, was once again the undisputed market leader in 2014,” said Diane Hames, DTNA’s general manager of marketing and strategy.
Navistar Inc. sold 31,131 of its International brand Class 8 trucks last year, up 17% from a year earlier. Market share, however, declined to 14.1%, from 14.4%.
Navistar has transitioned its truck lineup to selective catalytic reduction technology and has been working to rebuild its market share after abandoning its previous emissions strategy in 2012.
“We have come a long way in strengthening customer relationships across our channels, and we’re doing all of the right things to deliver value to our customers,” CEO Troy Clarke said on the company’s quarterly earnings call in December. “We’re confident that these actions will drive higher volume and market share.”
Meanwhile, sales at Kenworth Truck Co. rose 20% to 31,162, capturing 14.1% of the market, up from 14%.
Peterbilt Motors Co. also posted a 20% gain with 29,726 trucks sold. Its market share stood at 13.5%, up from 13.4% in 2013.
Kenworth and Peterbilt are owned by Paccar Inc.
Volvo Trucks claimed the industry’s strongest year-over-year growth rate — a 28.5% increase to 26,555 trucks sold — and its market share expanded to 12%, from 11.2%.
“For Volvo Trucks, the solid demand experienced in 2014 was a result of our fuel-efficient truck models and integrated powertrain,” said Magnus Koeck, vice president of marketing and brand management.
The strength in the overall market reflected both replacement and growth in response to favorable economic conditions, including a “robust” manufacturing sector and rising freight demand, Koeck said.
Mack Trucks Inc., which is also part of the Volvo Group, sold 19,652 trucks last year, a 21% gain. It captured 8.9% market share, up from 8.8%.
“As overall consumer optimism about the economy continued in December, the ongoing need to replace aging vehicles and a robust freight environment led some fleets to expand,” said John Walsh, Mack’s vice president of marketing.
Moving into 2015, Mack will continue to focus on expanding its presence in longhaul while building on its strength in the regional-haul, refuse and construction segments, Walsh said.
Sales for DTNA’s Western Star brand increased 21% to 3,645 units, representing 1.7% of the market, up from 1.6%.
Strong truck order activity at the end of 2014 indicates that Class 8 production and sales are likely to remain strong moving into 2015.
ACT Research reported that incoming orders for Class 8 trucks in North America topped the 40,000-unit mark in each of the final three months of 2014.
