July Class 8 Truck Sales Fall 54%

By Jonathan S. Reiskin, Associate News Editor
This story appears in the Aug. 20 print edition of Transport Topics.
U.S. retail Class 8 truck sales continued to slide in July, falling more than 54% from the same month last year, according to the latest survey by Ward’s Communications.Sales were hurt by a combination of fallout from record sales last year ahead of new federal emission requirements and a weak freight market this year.
For the first seven months of the year, heavy-duty sales by original equipment manufacturers were down by 40.1%, compared with the same time in 2006. Although it was the third straight month that sales rates decayed by more than 50%, an analysis of orders for new heavy-duty trucks by ACT Research Co. indicated that the market could be bottoming out.
OEMs sold 10,084 Class 8s in July, down 54.9% from the 22,336 sold the year before. All manufacturers lost sales in the month, with Volvo Trucks North America suffering the most, with a 73% plunge, and Sterling Trucks having the smallest dip, a 1.9% volume loss.
“Volvo continues to see soft demand for new heavy-duty trucks across the industry,” said company spokesman James McNamara. “The situation is much the same as for the last few months, with lower freight demand than last year.
“The after-effects of the U.S. pre-buy are still being felt, as well. . . . While the rest of 2007 remains difficult to assess, we do expect to see improvement next year,” McNamara said.
Volvo sold 664 heavy trucks last month, down from 2,456 in July 2006.
Paul Schlagenhauf, president of Badger Truck Centers, said Sterling’s customer base and approach to the cleaner-burning diesel engines have been somewhat different from those of other OEMs.
“I think many of our dealers ordered and stocked more of the pre-2007 engines. Smaller dealerships, especially, may have ordered more of these, so they could serve their customers later on and save them the extra $8,000 to $10,000 per truck the new engines cost,” said Schlagenhauf. He sells Sterlings in three southern Wisconsin dealerships and is the Sterling line representative within the American Truck Dealers trade association.
Schlagenhauf also said Sterling customers usually buy vocational vehicles, such as cement mixers and dump trucks or trucks for local hauling of beverages or household goods. “We do less over-the-road longhaul,” he said. Sterling’s customers, he said, may have cared less about the change in engines and, therefore, did less pre-buying last year than did most over-the-road, for-hire carriers.
Sterling sold 1,031 big trucks last month, down from 1,051 units. Mack Trucks, a sister company to Volvo and a close rival of Sterling’s, also mentioned inventory levels.
“As expected, demand for new heavy-duty trucks continues to be weak. The large number of pre-2007 trucks in inventory plus the soft-
ness in freight demand and housing construction continue to impact the market for new Class 8 trucks,” said Mack spokesman John Walsh.
Mack sold 868 U.S. Class 8s last month, down from 2,107 a year ago. For the first seven months of the year, Mack sales were 51.9% lower than the same period in 2006 — the biggest drop of any OEM.
Kenny Vieth, a partner at ACT Research Co., said October will be a key month for assessing when demand for vehicles will increase.
“Historically, the summer months are the weakest, and orders don’t recover until October, but that’s contingent upon how the economy is doing,” said Vieth.