VTNA: US Class 8 Retail Sales Running Below Expectations
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DUBLIN, Va. — U.S. Class 8 retail truck sales paced a bit below expectations through the first five months of 2024 and are now expected to total 260,000 to 270,000 vehicles overall in 2024, according to Volvo Trucks North America Vice President of Strategy, Marketing and Brand Management Magnus Koeck.
However, there are bright spots, including among private fleets, the executive said.
Speaking at a media event at VTNA’s newly expanded New River Valley complex in Dublin, Va., Koeck said the North American Class 8 market was in the midst of an expected correction and the first five months of the year progressed largely as expected. VTNA previously expected retail sales to total 270,000 trucks.
“The market, I would say, behaved exactly as we have anticipated it to do. We have come from a high market, and we all know what happened [during the COVID-19 pandemic] and recovered very, very quickly with everyone having survived some disturbances and so on,” he told reporters. “The demand vastly exceeded supply. Now we’re going into a correction of the market.”
Sales through the first five months of 2024 fell 14.6% year-on-year to 95,401 units from 111,723, according to the latest data from Wards Intelligence.
VTNA executive Magnus Koeck said the North American Class 8 market "behaved exactly as we have anticipated it to do" in the first five months of the year. (Keiron Greenhalgh/Transport Topics)
Retail sales fell for a 10th consecutive month on a year-over-year basis in May, decreasing 18% to 19,764 units from 24,111, the Wards data shows. Sales also declined 0.2% from 19,798 units in April.
And prices are currently level with the last weak pre-pandemic period of late 2019 in real dollars, Chris Visser, director of specialty vehicles at J.D. Power, said in a June 19 LinkedIn post. Depreciation in 2024 is averaging 2.8% per month, he said, but the traditional retail buyer is facing a difficult lending and insurance environment.
Through May 31, VTNA sold 9,952 Class 8 vehicles in the U.S., and the Volvo Group subsidiary’s market share in the U.S. was 10.4% through the end of May. That compares with 9.9% in the year-ago period and 10% overall in 2023, according to materials provided by Koeck.
VTNA’s market share in Canada through the first five months of 2024 was 13.7%, according to company data, compared with 11.9% in the year-ago period and 11.8% across all of 2023.
The company’s market share across the U.S. and Canada in the first five months of the year is estimated at 10.8%, compared with 10.1% a year earlier and 10.2% across all 12 months of 2023.
Sales of 260,000-270,000 are still very strong in historical terms, Koeck said, and especially so given the ongoing freight recession.
“So, we are in the bottom, now we know this. I’m very convinced that [the rebound will start] at the end of this year, but we may need to wait until the day after the election. The markets will come back, even if the economy may not be that strong,” Koeck said.
“For-hire fleets had their worst quarter in a decade,” he noted.
The latest Transport Topics Top 100 list of the largest for-hire carriers in North America illustrates the strain the segment is under, with many reporting declining revenues and weaker profits in 2023 due to the freight-capacity-supply overhang keeping a lid on rates and boosting shippers’ position in contract talks.
Corey Cox of the Tandet Group of companies discusses how early AI adopters are beginning to harvest the latest wave. Tune in above or by going to RoadSigns.ttnews.com.
However, private fleets are doing pretty well, Koeck said, adding that private fleets already are starting their pre-buy purchases ahead of the introduction of U.S. Environmental Protection Agency regulations.
Pre-buy orders will start in earnest next year, Koeck said, adding that 2026 will see massive pre-buy numbers. “Demand will vastly exceed supply,” he said. “If you wake up at the end of ’25 and believe you will have vehicles ready to go in February ’26 or so, you are mistaken.”
Once the EPA regulations take effect in 2027, then the market will not be as strong, Koeck said, with trucks set to be $20,000 more expensive that year, but there will be a subsequent recovery in 2028.
It's here! @VolvoTrucksNA all-new VNL. https://t.co/fivtSWa6XH — Volvo Group NA (@VolvoGroupNA) January 23, 2024
VTNA will be well-positioned to meet the coming demand, the executive said, with the January launch of a redesigned flagship Class 8 tractor, the $400 million expansion of the New River Valley manufacturing plant and the start of production in Mexico in 2026.
“When the market comes back, we will be in full swing with VNL production,” Koeck said.
VTNA opened the order book for the flagship VNL in April. Series production is expected to start later this summer, and deliveries will start in the fourth quarter.
The truck maker also plans to offer many more tractors with alternative-fuel drivetrains, including battery-electric sleepers. VTNA offered the first glimpse of a VNL Electric semi at the end of the first day of the event that began with Koeck’s market outlook.
Orders for the VNL Electric are expected to open in the last couple of months of 2025 or at the beginning of 2026, Koeck told TT.
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