Class 8 Truck Sales Slide Slows

This story appears in the Dec. 21 & 28 print edition of Transport Topics.

The steep, yearlong decline in heavy-duty U.S. truck sales slowed to 16.4% below the 2008 level in November, or nearly half as much as the 11-month fall of 31%, according to the latest survey by WardsAuto.com.

Although Class 8 retail sales have fallen on a year-over-year basis every month this year, the rate of decline for November is the lowest.

Original equipment manufacturers and their dealers sold 8,861 heavy trucks for the month, compared with 10,598 in November 2008, Ward’s said Dec. 10. Cumulative 11-month sales were 83,241 vehicles, down from 120,726 a year ago.

Industry participants said in interviews they expect a brief resurgence in December volumes that they said would last into the first quarter before dissolving into another “lull.” The activity was linked to last-minute buying, so companies could claim more depreciation on their 2009 taxes, and a miniature pre-buy to avoid tractors with 2010 engines, dealers said.

“I think the fourth quarter will be this year’s best quarter, and December and January look good, but then we’re anticipating a drop off,” said Bill Kozek, general manager of Kenworth Trucks, a division of Paccar Inc. He said the purchases in December and January were from a wide array of customers buying in small numbers, and they will be sopping up the last of the engines made before Dec. 31.

“We had an OK November and are anticipating a fairly decent December,” said Jack McDevitt Jr., who sells Mack Trucks and other brands in New England. He said some customers have mentioned the tax advantages of buying late in the year, and others have bought attractively priced trucks that have hung around for too long as inventory.

Dealer Duane Kyrish of Lonestar International sells throughout Texas and seconded the observation of tax-based purchasing. Buyers can claim a full year of depreciation, even if they delay a purchase until December.

“There’s been a flurry of activity. It’s been ‘I gotta get one this month’ sort of buying,” Kyrish said, adding that some purchases have been related to avoiding 2010 engines with more emissions controls, but not all.

Beyond the sales of the immediate period, all three men expressed worry about what happens in March and thereafter. If there is no improvement in the need for trucking services, they said, truck sales will dive again.

Kozek said the sales environment will be a “lull,” while McDevitt opted for expecting a “black hole” and Kyrish went with “very, very slow.”

Looking at freight and truck sales, research firm FTR Associates said it increased its Class 8 forecast for this year because of a surge in orders in October. However, those orders are likely to reduce early 2010 freight-induced demand because the order activity was driven by truckers lining up for the last of pre-2010 emissions engines.

“2009 will end with modest freight growth, and we expect 2010 growth to be in the 2.8% range. However, given the huge decline in freight over the last few years, the increase in freight in 2010 will not be enough to entice fleets in large numbers to buy new, more expensive technology when such equipment is first made available,” said FTR President Eric Starks.

Ward’s reported that Kenworth and Mack were joined by Freightliner Trucks as the three nameplates to post slender gains for November.

Freightliner sold 2,789 units — the most of any OEM — a 1.7% increase over the 2,742 vehicles it moved in November 2008. Year-to-date sales dropped 27.6% to 22,219 vehicles.

Kenworth took third place for the month, selling 1,026 heavy trucks, a 0.2% increase over the 1,024 it sold the previous November. Cumulative volume fell 30% to 9,997 vehicles.

Mack came in fifth, selling 771 trucks, or 1.3% more than the 761 moved in the 2008 month. The 11-month volume was 6,519, a 37.7% decline.

Navistar Inc., which makes Internationals, finished in second place for the month, but still leads for the year. The OEM sold 2,522 trucks, down 17.7% from the 3,066 moved the previous November. Cumulative volume fell 18.9% to 23,958 units.

Peterbilt Motors, also a Paccar company, sold 956 heavy trucks to take fourth for the month. That was a 19.7% decline from the 1,190 moved in November 2008. Year-to-date volume fell 30.9% to 10,803 units.

Volvo Trucks North America, a sister company to Mack, took sixth place, selling 686 Class 8s for the month, or 46.7% less than a year ago, when its volume was 1,286. The 11-month volume fell 48% to 6,233 vehicles.

Sterling and Western Star Trucks, which join Freightliner within Daimler Trucks North America, took the last two spots.

Sterling ceased production in March and is now just selling off inventory. In November, it moved 69 units, or 84.2% less than a year earlier. The cumulative volume has fallen 58.4% to 2,873 vehicles.

Western Star had monthly sales of 42 units, or 52.3% less than the 88 from the previous November. Eleven-month volume was 623 heavy trucks, a 43.7% decline.