U.S. Fleet Growth Slows to 1.4% in First Quarter, Polk Reports
By Jonathan S. Reiskin, Associate News Editor
This story appears in the June 9 print edition of Transport Topics.
The nation’s fleet of heavy-duty trucks grew by just 1.4% a year during the first quarter, the slowest growth rate yet since the record sales year of 2006, as businesses bought fewer used and new vehicles, according to a survey of U.S. vehicle registration data by R.L. Polk & Co.
In its May 22 report, Polk, of Southfield, Mich., also projected that registrations of new Class 8 vehicles will fall 26% this year, the second straight annual drop.
“No one is in a buying mood now, unless they have to,” said Gary Meteer Sr., Polk’s account director for commercial vehicles services, in an interview. “This confirms that it’s really, really slow out there.”
“We’re predicting the back half of 2008 will be better,” said Meteer. “The first 90 days of a year is typically the weakest, and then registrations grow.”
U.S. businesses registered 31,492 newly purchased Class 8 trucks during the first quarter, a 43% decline from last year. Based on that, Polk predicted new heavy-duty registrations will total 125,500 this year, compared with 169,600 new heavy-duty trucks in 2007.
The survey found 3.59 million Class 8 trucks were registered for operation during the first quarter, up from 3.54 million during the January-to-March period in 2007.
For commercial vehicles as a whole, defined as gross-vehicle-weight rating Classes 3-8, the nation’s fleet grew at an annual rate of 3.6% to 11.54 million during the first quarter.
Registrations for new Class 8s grew most strongly during the second quarter of 2006, the year of the pre-buy sales boom. During that quarter, registrations increased by nearly 8% year-over-year, but since then growth has declined steadily. In 2006, 272,700 new heavy-duty trucks were registered, or more than twice what Polk forecast for this year.
Fleet maintenance managers have worked on extending the service life of trucks, said Stephen Sabo, maintenance manager of Norrenberns Truck Service, Nashville, Ill.
“We started adjusting trade cycles when the EGR models [exhaust gas recirculation engines] came out that year. Truckload carriers went from three years to four, or four years to five,” said Sabo, who also is vice chairman of the Technology & Maintenance Council of American Trucking Associations.
In looking at the current landscape for truck buying, Sabo said he knows of one 2,000-tractor less-than-truckload fleet that has not purchased a single truck that uses the January 2007 generation of engines, and he anticipates lots of used equipment will be on the market because of recent trucking bankruptcies.
“Some owner-operators around here [southern Illinois] kept their trucks over the winter even though they wanted to dump them in the fall. There have been lots of carriers going out of business and the used-truck market is almost saturated,” Sabo said.
Polk found sales of used trucks fell 11.8% to 124,150 vehicles during the first quarter.
Meteer said Polk has found a new development, in terms of sales of used U.S. trucks to overseas buyers.
“Anecdotally, people told us the demand for used equipment is better,” Meteer said, adding that if a used vehicle moves to another country without there being a change in registration, Polk’s data will not pick that up.
Polk’s survey showed gasoline engines have gained in popularity for newly registered medium-duty trucks, as diesel fuel prices have soared.
Polk found the increase in registrations for gasoline-powered engines was most pronounced in Class 3, but also significant in Classes 5 and 6. Vehicles with gas engines made up 30.4% of new Class 3 registrations during the quarter, up from 22.6% in the year-ago quarter.
In Class 5 there was an increase to 11.8% from 9.8% and in Class 6 there was an increase in new gas-powered vehicles to 24.9% from 17.1%, Polk found. However, in Class 4 gasoline usage in new vehicles declined to 41.6% from 47.8% in the year-ago quarter.
The increase in registration of gas-powered vehicles coincides with the exorbitant increase in diesel prices (6-2, p. 1).
“Diesel used to be less expensive than gasoline, rather than more,” said Dave Fulghum, a vice president at MacKay & Co., a Lombard, Ill., industry consulting firm. “Diesel engines may have cost more to begin with, but they got better mileage and used cheaper fuel. They still get better mileage but the cheaper fuel has gone away,” said Fulghum in explaining how fleet managers approached the diesel-versus-gasoline debate.
This story appears in the June 9 print edition of Transport Topics.
The nation’s fleet of heavy-duty trucks grew by just 1.4% a year during the first quarter, the slowest growth rate yet since the record sales year of 2006, as businesses bought fewer used and new vehicles, according to a survey of U.S. vehicle registration data by R.L. Polk & Co.
In its May 22 report, Polk, of Southfield, Mich., also projected that registrations of new Class 8 vehicles will fall 26% this year, the second straight annual drop.
“No one is in a buying mood now, unless they have to,” said Gary Meteer Sr., Polk’s account director for commercial vehicles services, in an interview. “This confirms that it’s really, really slow out there.”
“We’re predicting the back half of 2008 will be better,” said Meteer. “The first 90 days of a year is typically the weakest, and then registrations grow.”
U.S. businesses registered 31,492 newly purchased Class 8 trucks during the first quarter, a 43% decline from last year. Based on that, Polk predicted new heavy-duty registrations will total 125,500 this year, compared with 169,600 new heavy-duty trucks in 2007.
The survey found 3.59 million Class 8 trucks were registered for operation during the first quarter, up from 3.54 million during the January-to-March period in 2007.
For commercial vehicles as a whole, defined as gross-vehicle-weight rating Classes 3-8, the nation’s fleet grew at an annual rate of 3.6% to 11.54 million during the first quarter.
Registrations for new Class 8s grew most strongly during the second quarter of 2006, the year of the pre-buy sales boom. During that quarter, registrations increased by nearly 8% year-over-year, but since then growth has declined steadily. In 2006, 272,700 new heavy-duty trucks were registered, or more than twice what Polk forecast for this year.
Fleet maintenance managers have worked on extending the service life of trucks, said Stephen Sabo, maintenance manager of Norrenberns Truck Service, Nashville, Ill.
“We started adjusting trade cycles when the EGR models [exhaust gas recirculation engines] came out that year. Truckload carriers went from three years to four, or four years to five,” said Sabo, who also is vice chairman of the Technology & Maintenance Council of American Trucking Associations.
In looking at the current landscape for truck buying, Sabo said he knows of one 2,000-tractor less-than-truckload fleet that has not purchased a single truck that uses the January 2007 generation of engines, and he anticipates lots of used equipment will be on the market because of recent trucking bankruptcies.
“Some owner-operators around here [southern Illinois] kept their trucks over the winter even though they wanted to dump them in the fall. There have been lots of carriers going out of business and the used-truck market is almost saturated,” Sabo said.
Polk found sales of used trucks fell 11.8% to 124,150 vehicles during the first quarter.
Meteer said Polk has found a new development, in terms of sales of used U.S. trucks to overseas buyers.
“Anecdotally, people told us the demand for used equipment is better,” Meteer said, adding that if a used vehicle moves to another country without there being a change in registration, Polk’s data will not pick that up.
Polk’s survey showed gasoline engines have gained in popularity for newly registered medium-duty trucks, as diesel fuel prices have soared.
Polk found the increase in registrations for gasoline-powered engines was most pronounced in Class 3, but also significant in Classes 5 and 6. Vehicles with gas engines made up 30.4% of new Class 3 registrations during the quarter, up from 22.6% in the year-ago quarter.
In Class 5 there was an increase to 11.8% from 9.8% and in Class 6 there was an increase in new gas-powered vehicles to 24.9% from 17.1%, Polk found. However, in Class 4 gasoline usage in new vehicles declined to 41.6% from 47.8% in the year-ago quarter.
The increase in registration of gas-powered vehicles coincides with the exorbitant increase in diesel prices (6-2, p. 1).
“Diesel used to be less expensive than gasoline, rather than more,” said Dave Fulghum, a vice president at MacKay & Co., a Lombard, Ill., industry consulting firm. “Diesel engines may have cost more to begin with, but they got better mileage and used cheaper fuel. They still get better mileage but the cheaper fuel has gone away,” said Fulghum in explaining how fleet managers approached the diesel-versus-gasoline debate.
