Truck Sales Continue Slide

This story appears in the Oct. 19 print edition of Transport Topics.

U.S. Class 8 truck sales continued to slide during September, with truck makers recording 28.7% fewer deals than they completed in the corresponding month last year, according to data supplied by WardsAuto.com.

There also was some rare positive news about truck sales, as ACT Research Co. forecasters said they believe the heavy-duty truck market is on the threshold of “a three-year period of steady growth.”

Original equipment manufacturers and their dealers sold 7,769 trucks in September, compared with 10,891 in September 2008. For the year’s first nine months, customers bought 65,880 units, a 32.8% falloff from last year’s three-quarter mark of 98,055 units.

“We’re still seeing the same as most other dealers. New truck sales are slow,” said Chad Remp, operations manager of Wheeling Truck Center, a Volvo dealership in West Virginia.

Executives at Navistar Inc. had once expected a pickup in sales ahead of the Jan. 1 tightening in federal emission regulations, “but we haven’t seen it,” said company spokesman Roy Wiley. “The market’s still very soft.”

However, there were optimistic words from ACT. “We believe the economy has transitioned out of the Great Recession and changed into slow growth — including freight growth,” said partner and senior analyst Kenny Vieth. The change will not be jarring, though, he cautioned.

“We don’t expect this to really gain traction until the second half of 2010. That’s when you’ll start to see real growth,” Vieth said.

His prediction is consistent with remarks made by the global head of Daimler Trucks during a U.S. press tour earlier this month. Andreas Renschler said North American truck sales should be 10% better in 2010 compared with this year’s levels. That would not match 2008 levels, but it would break the three-year string of sales contractions.

Renschler shied away from offering a precise timeline for recovery, but said the important linkage is that “new truck sales follow almost immediately after economic recovery.”

ACT’s Vieth said he is looking for more sales and stronger pricing in the used truck market.

“That’s the canary in the coal mine. Before you can get any recovery in new truck pricing and sales, you’ll have to see it in used equipment first,” Vieth said.

Remp said he has seen some pickup in the used truck market among his customers in the Ohio-Pennsylvania-West Virginia area.

“We’ve had an uptick in used truck sales for about two months. They’re selling because it’s economical — about half the price of a new truck.

“You can get back on the road without putting a lot of capital at risk,” he said, adding that buyers have been zeroing in on recent models with low mileage.

Meanwhile, FTR Associates said that heavy-duty North American orders increased for the fourth straight month, but the improvement was not a sign of recovery.

“Any increases we are seeing now are partially driven by abnormal industry activity ahead of the 2010 [Environmental Protection Agency] emissions mandate. The data we track does not support any significant purchasing activity driven by increased freight demand any time soon,” said FTR President Eric Starks.

Among the individual OEMs, Navistar, maker of International brand trucks, finished first for the month and maintained its year-to-date lead.

The company sold 1,985 heavy trucks, a 24.1% decline from the 2,617 it moved in September 2008. For the first nine months, the 18,830 units sold represent a 17.4% decline from last year’s pace. Still, the company’s nine-month market share increased to 28.6% from 23.3% last year.

Freightliner Trucks finished second, selling 1,963 vehicles, a 29.4% decrease from 2,781 the previous September. Three-quarter sales were 17,264 units, a 30.8% decline from a year ago.

The brands of Paccar Inc. took the next two spots, with Peterbilt Motors selling 1,204, a 21% decline from September 2008. Year-to-date sales were 8,625, a 33.2% falloff.

Kenworth Trucks experienced the smallest decline, moving 1,187 units, a 9% dip from 1,305 a year ago. Nine-month sales were 7,934 heavy vehicles, a 34.2% decrease.

Mack Trucks, a part of Volvo AB, sold 647 heavy trucks, a 35.7% decrease from the 1,006 units in September 2008. Year-to-date sales were 5,045 vehicles, a 42.6% drop.

Volvo Trucks North America took sixth, selling 548 units, a 35.5% decline from 850 a year ago. Three-quarter sales were 4,913 units, a 48.9% falloff.

The two smaller brands within Daimler Trucks North America had the most severe monthly sales declines.

Sterling Trucks sold 163 units, or 75.5% less than the 666 it moved a year ago. Nine-month sales were 2,728 units, a 53.4% decrease.

The brand discontinued new production in March, and DTNA chief executive Martin Daum told re-porters that all of Sterling’s inventory should be gone by about the end of this year.

Western Star Trucks sold 72 big trucks, or 48.2% less than the 139 it sold in September 2008. Year-to-date volume was 529 units, a 44% decline.