Volvo Stays Positive on Class 8 Truck Sales Prospects in ’24
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Volvo Trucks North America is forecasting a solid year for Class 8 sales in 2024, but expects activity for an anticipated pre-buy of new trucks ahead of federal emission rules taking effect in 2027 to begin bustling as soon as the second half of the year.
The reasoning, said VTNA Vice President of Strategy, Marketing and Brand Management Magnus Koeck, is rooted in lessons learned from the COVID era, when supply chain disruptions stymied manufacturing and sent prices for the scant supply of trucks available skyward.
“They won’t wait until 2026 to buy units,” he said of customers during a Feb. 13 event at the truck maker’s Volvo Trucks Customer Center in Dublin, Va.
In 2027, a new round of limits on nitrogen oxide emissions from the Environmental Protection Agency is set to take effect. “The pre-buy will start earlier, and we probably will see that this year in the back half and into 2025 and 2026,” Koeck said.
A heritage of forward thinking comes to life in the #AllNewVolvoVNL. pic.twitter.com/8bveFzHgmF — Volvo Trucks North America (@VolvoTrucksNA) February 19, 2024
Koeck expects 2026 will be a record year for North American truck sales, and expects 2027 will experience a steep drop.
For 2024 overall, VTNA is forecasting an overall market of about 270,000 trucks — a “good year,” Koeck said — but down from the company’s market number of about 296,000 for 2023.
Still, Koeck is optimistic that the freight market has reached its bottom, and that the economy has staved off the recession many feared. “We’re pretty convinced there won’t be a recession,” he said. “We will have a soft landing, and we are into that situation right now.”
Koeck added, “The inflation [data] is much better.”
CPI for all items rose 0.3% in January; shelter up https://t.co/dJyJeKlXDJ #CPI #BLSdata — BLS-Labor Statistics (@BLS_gov) February 13, 2024
While inflation topped expectations in January, consumer price index data from the Bureau of Labor Statistics issued Feb. 13 further trimmed chances of a rate hike by the Federal Reserve, allowing fleets a clearer picture on the cost of truck purchases. Jobs data is also supportive, bolstering consumer purchasing power. The Department of Labor reported Feb. 2 that 353,000 jobs were added in January, compared with the median 185,000 expected by analysts.
The trucking industry, Koeck noted, is coming off of a rough 12 months during which contract rates for freight declined in the high single digits and spot rates declined by double-digit rates.
“We believe that we are currently on the bottom, and it will go up,” he said. “Spot trading is slightly improving, which is good.”
VTNA is aiming to claim a larger share of the truck buyers who will be hauling that freight with its redesigned VNL Class 8 tractor, which the company showcased at the event. Koeck said order books will open in April, followed by production kicking off in the third quarter.
Only the second complete redesign since the VN series was launched in 1996, the truck will serve as the platform for the next decade or more of new Class 8 products, he said, including autonomous, battery- and fuel-cell electric and hydrogen internal combustion engine models. “This is the platform for all new vehicles going forward. We will have many more models,” he said. “This platform is much more versatile.”
In addition to readying a new platform to prepare for the forthcoming emissions rule regimen, Koeck said VTNA wants to keep pace with the marketplace.
“We want to stay competitive,” he said.
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