October Class 8 Sales Rise Slightly, But New Orders Tumble

By Frederick Kiel, Staff Reporter

This story appears in the Nov. 24 print edition of Transport Topics.

U.S. Class 8 truck sales rose slightly in October, while the total number of vehicles sold over the first 10 months of 2008 still was 14.4% below 2007’s anemic levels, according to data from WardsAuto.com.

Analysts said they’re not seeing any early resurgence in sales. New truck orders for October, which give a better indication of future sales, “were in the pits,” said Ken Vieth, senior partner of A.C.T. Research, which tracks order data on commercial vehicles.

“There were 10,600 new Class 8 orders in October in North America . . .  and that figure was down 48% from orders in October of 2007,” Vieth told Transport Topics.

October truck sales rose 2.6% above October 2007, the fifth consecutive monthly gain, Ward’s said Nov. 13, and, at 12,073 units climbed above 12,000 for the first time this year.

The last time the industry sold more than 12,000 in a single month was in December 2007, when 12,034 units were sold.

October’s sales increase was the lowest in the five-month run of gains. Truck sales were up 9.5% in June, 10.8% in July, 9.2% in August, and 12.5% in September.

Truck producers have sold 110,128 Class 8s in the United States through the first 10 months of this year, compared with 128,622 in the same period last year, Ward’s said.

Transportation analysts said low trucking-company profits and high costs will keep sales depressed.

Chris Brady, president of Commercial Motor Vehicle Consulting, Manhasset, N.Y., said fleets would postpone replacing older trucks until profits improve.

“In the short-term, over the next few quarters, balance sheet consideration will outweigh rising maintenance expenses,” Brady told TT.

“The fourth quarter is where fleets start get into placing orders for the new year and we’re seeing very little of that,” ACT’s Vieth said. “The September financial panic has caused everyone to take a step back from new investments.”

Todd Fowler, transport analyst at Key Banc Capital Markets Inc., reported that the six major publicly traded fleets he follows have cut their fleet capacity considerably.

Key Banc said it expects the fleets to keep their capacity near its present rate in order to be able to increase freight rates when demand rises, another negative sign for early truck sales growth.

The increase in October truck sales was powered by strong sales gains by International and Freightliner.

Navistar Inc. sold 3,671 of its International Class 8s to take top market share of 30.4% for the month, Ward’s said.

International is the only brand to have a positive sales record in 2008 to date — up 7.1% through October, with 26,478 units sold.

“We’re doing well, but we’re doing well in a very bad market, so we’re not overjoyed, but still satisfied,” Navistar spokesman Roy Wiley told TT.

Daimler Trucks North America was in second place with its combined sales for Freightliner, Sterling and Western Star taking a 30.3% market share with 3,653 units sold.

“I will not be angry if we lose market share, because that is second in our concerns to margins [of profit],” Andreas Renschler, head of Daimler AG’s truck division, told a TT editorial board Nov. 20.

DTNA retained its market-share lead for the year with 32.2%.

Its Freightliner brand sold 2,966 units in October, 23.8% more than last year. Sterling Trucks, which Daimler AG will close next year, sold 614 units, down 24.9%, and Western Star, sold 73, down 49.7%.

Freightliner remained the 2008 market leader with 27,932 units sold for a 25.4% share; International was second with 26,478 trucks sold.

“The sentiment in the industry is that it’s tough right now everywhere,” Frank Ellett, president of Virginia Truck Center Inc., told TT. His company is a Freightliner dealer with seven locations in Virginia, North Carolina and South Carolina.

Peterbilt Motors, a subsidiary of Paccar Inc., held its own in October, selling 1,533 Class 8s for a 0.1% increase from units sold last October.

Kenworth Truck Co., another Paccar company, sold 1,198 units, down 20.1% from October 2007.

“Because of the slow economy and slow truck sales, we are making layoffs at our Renton [Wash.,] plant,” Kenworth spokesman Jeff Parietti told TT.

He would not comment on the number of layoffs. The Associated Press, citing union leaders, reported that 430 will lose their jobs.

Volvo Trucks North America sold 1,089 units, down 16.6% from last year, and Mack Trucks Inc. sold 929 trucks, down 20.4%.

Spokesmen for Kenworth, Peterbilt and Mack declined comment. Volvo did not respond to a request for comment.