August Class 8 Truck Sales Slide 33%

This story appears in the Sept. 21 print edition of Transport Topics.

Sales of new heavy-duty trucks in the United States fell 33.3% in August from year-ago levels, the eighth consecutive monthly decline.

The monthly total matched the decline in sales from January through August compared with 2008, and analysts and dealers said they hold little hope the bleak market will significantly improve anytime soon.

Fleets bought 7,151 new Class 8 trucks last month, down from 10,722 in August 2008, according to data supplied by WardsAuto.com.

Through the first eight months of 2009, truck manufacturers and dealers sold a total of 58,111 new Class 8s, down from 87,164 for the same period last year, also equal to a 33.3% drop, Ward’s said.

“Our information suggests that fleets will remain on the sidelines for a while yet, with executives pretty reluctant to take on additional equipment,” Eric Starks, president of transportation consulting firm FTR Associates, Nashville, Ind., told Transport Topics. “Sales are well below the replacement rate, with our figures showing the trucking industry is scrapping about 12,500 heavy trucks a month, which is a good thing in the long run, as it removes excess capacity.”

Starks said even that scrapping rate would not trigger robust sales any time soon.

“We don’t expect freight loads to show real growth until the second half of 2010, and not a substantial recovery in capacity until 2011,” Starks said.

W. Marvin Rush, chairman of Rush Enterprises, New Braunfels, Texas, said his company is the largest Peterbilt truck dealer in the country, and operates about 50 stores in 11 states. “It’s not a question of price, because you can ride ’em down to practically give-them-away, but people still don’t want them. There are just so few buyers,” he said.

Rush said he saw no signs of any early improvement: “We keep thinking we’re at the bottom, but we haven’t seen anything yet that the market is starting to come back, and there is no pre-buy [in advance of changing emission rules].  Our opinion is that . . . [sales] will start creeping up somewhere at the end of next year, but we won’t see anything like normal times until 2012 or even 2013.

“I compare everything to the best year we ever had, 2006, when we sold 12,500 Class 8s,” he continued. “This year, we’ll be lucky to deal 4,500, maybe 5,000 tops, off about 60%. We were selling 200 heavy-duty trucks a month from our stock in lots in 2006, and this year, it’s been about 40 a month.

“We’re still making a little money, but not much,” Rush added.

Duff Swain, president of the truck consulting firm Trincon Group, Columbus, Ohio, agreed with Rush that the industry will not soon see a sales year again like the record of 2006, when 284,000 Class 8s were sold. He told TT a combination of the weak economy and trucking and technology trends could push normality back five years or more.

Steve Tam, vice president of the commercial vehicle sector of Columbus, Ind.-based ACT Research, which tracks orders data, said that Class 8 orders increased in August over July but were behind last year.

“In preliminary data in August, we saw net new orders of about 11,000, up from 9,164 in July, but we had 15,412 new orders last August,” Tam told TT.

Freightliner Trucks, a division of Daimler Trucks North America, was the sales leader with 1,870 vehicles sold in August, for a 26.2% market share, Ward’s reported.

However, Freightliner sales were 40.4% down from the 3,135 it sold in August last year. DTNA did not reply to requests for comment.

Navistar Inc.’s International Trucks, which had been the market leader, slipped to second, selling 1,855 heavy-duty vehicles, for 25.9% of the market, Ward’s said. International was down 26.4% from its August sales last year, which reached 2,520 units.

 “We’re down, but we’re down much less than most anyone else,” Navistar spokesman Roy Wiley told TT.

“It’s tough economic times, and that’s when a lot of people look for the most fuel-efficient trucks, which we think we make,” Wiley added.

International is the market leader for the year to date, garnering 16,845 sales for 29% of the market, while Freightliner sold 15,301 for second place at 26.3%, Ward’s reported.

Paccar Inc.’s two brands held the next two places of market share, with Peterbilt Trucks selling 1,255 units in August for 17.5%, while Kenworth Truck Co. sold 918 units sold, for 12.8%.

Volvo AB’s two brands were next, with Mack Trucks Inc. selling 533 trucks for 7.5% market share, and Volvo Trucks North America with 435 sales, for a 6.1% share.

DTNA’s other two brands had the rest of sales for the month, with its terminated Sterling brand, where manufacturing ended in March, selling 237 units for 3.3% market share; and Western Star selling 48 trucks for 0.7% market.

Peterbilt was down 16.1% from August 2008; Kenworth down 29.3%; Mack down 35.6%; Volvo down 40.4%; Sterling down 62.3%; and Western Star down 39.2%.

For the year to date, Peterbilt sold 7,421 for a 12.8% share; Kenworth, 6,747 for 11.6%; Mack, 4,398 for 7.6%; Volvo, 4,365, for 7.5%; Sterling, 2,565, for 4.4%; and Western Star, 457 for 0.8%.