April Class 8 Registrations Rise 8%

By Jonathan S. Reiskin, Associate News Editor

This story appears in the June 28 print edition of Transport Topics.

New U.S. registrations of heavy-duty trucks grew 8.4% in April compared with the same month a year ago, following an 11.3% gain in March, according to R.L. Polk & Co.

The special report from Polk corroborated reports of monthly retail-truck sales that first turned positive in January. It also showed new registrations in Classes 3 and 6 gaining in April, while Classes 4, 5 and 7 declined, the Southfield, Mich., research firm said June 18.

“New commercial vehicle registrations in April totaled 27,300 units [Classes 3-8], an increase of 2.8% from April 2009,” Polk said. “The performance of April 2010 versus April 2009 represents the second consecutive month in which new registrations were higher than the same month the previous year. The last similar occurrence was in August and September 2006.”

Separately, ACT Research Co. said May orders for new Class 8 trucks are front-loaded to an unusual degree, indicating the fleets that have ordered are very serious about taking possession of their vehicles. Truck dealers, however, said business is sporadic and still far below a typical year.

“Of the 13,231 net new orders booked in May, about 10,000 are for delivery through September. That’s more than 70% within four months, and usually it’s 60% to 65% within six months, so these people are serious,” said Kenny Vieth, ACT partner and senior analyst.

The ACT numbers released June 21 are the final version for May, after a preliminary report was published earlier in the month (6-14, p. 3; click here for story). The May performance was 84% better than the corresponding month in 2009.

Heavy-duty U.S. truck sales have fallen on an annual basis for three years through 2009. In January the year-over-year comparison was up 0.2%, with increases since then ranging from 9% to 30% through May. For two truck dealers, though, the talk of percentages obscures the very low level of sales in terms of absolute numbers.

“Business seems sporadic. Some days we’re feverishly working the phones, but it’s not as if there’s a steady flow of work,” said International and Ford dealer Dick Witcher of Minuteman Trucks, Walpole, Mass.

Witcher said business is better than a year ago, but he thinks part of that is because he switched his heavy-duty brand affiliation to International from the discontinued Sterling Trucks nameplate. He said discussions with his customers about the health of their businesses do not make him especially optimistic, and at some point he needs to see better raw numbers.

“As an industry, our sales have declined more than 60% over a period of years. So even if you get a jump of 15% to 20%, year-over-year, it means almost nothing. We’ve been relying on our parts-and-service business to get by,” said Witcher, who also is vice chairman of American Truck Dealers.

Heavy-duty U.S. truck sales peaked at 284,008 in 2006 and fell 66.6% to 94,798 last year. Polk is predicting that 110,400 new Class 8s will get registered this year — an improvement of about 10% — but still a very poor year.

Leaving aside the extraordinary sales years of 2005 and 2006, the last normally good year may have been 2004, when U.S. fleets and owner-operators bought 203,197 new Class 8s, according to Wards-Auto.com.

That would be an average of about 16,900 trucks a month, or still far more than May’s order intake. So far this year, new sales have topped 9,000 per month once.

Baltimore Mack and Volvo has had some decent sales at its two locations this year, but not for encouraging reasons, said sales manager Michael Gorsch.

“The retail sales we’ve had in the last few months were for pre-2010 products. We’ve sold out of those and placing orders to replace them with new trucks. The customers say their first preference is to find them some old trucks at good prices,” Gorsch said.

Baltimore Mack’s customers tend to want vocational models such as dump trucks and cement mixers, Gorsch said, a business that is “still extremely soft.” In comparison, he said demand for highway tractors hauling freight is doing better.

The Polk report said that new Classes 3-8 truck registrations have expanded most in the central states from Ohio through the Dakotas, up 3.7%, year-over-year, for the first four months.

From Virginia through Maine, the Northeast saw a 0.6% increase, while the South declined by 4.4% and the West by 15.8%.

In Texas, though, Kenworth Trucks said June 23 that it received an order for 500 new Kenworth T700s from refrigerated hauler Stevens Transport of Dallas. A new model, the T700 was unveiled in March at the Mid-America Trucking Show, and Kenworth has marketed it on its aerodynamic efficiency.