February Truck Sales Rise 19.1%

This story appears in the March 22 print edition of Transport Topics.

Manufacturers and their dealers sold 19.1% more big trucks in February than they did a year earlier, marking the second consecutive month in which Class 8 sales beat their year-ago totals, according to WardsAuto.com.

New-truck sales in February totaled 7,427 units, up from 6,236 in the same month of 2009.

It’s a large increase over year-ago levels, but total February sales improved only slightly — 40 trucks — over January. And the comparative gains were enhanced by the fact that February 2009 was the lowest month for sales since 1983, according to Ward’s.

And though they were generally optimistic, industry analysts and truck dealers said that the main driving force for new-truck sales was demand for vehicles built without the latest emission-control technologies — which add thousands of dollars to the price of a new tractor.

They said that, as a result of the lingering pre-buy, a full recovery remains unlikely for the heavy-duty truck market until late this year or early next year.

“There’s still very little activity as far as trucks with the new engines,” said Frank Ellett, president of Virginia Truck Center, which has seven dealerships in Virginia and North Carolina. The dealer sells mostly Freightliners and Macks.

ACT Research, Columbus, Ind., also reported March 18 that net orders for new Class 8 trucks numbered 7,900 units in February, which it said was a 20% increase over orders in February 2009 and 20% over January orders this year.

Another transportation research firm, FTR Associates, Nashville, Ind., said in a preliminary report March 10 that it counted 7,628 orders for new Class 8 trucks in February, 12% over February 2009 (click here for previous story).

Both research organizations said they independently research their data.

One analyst said that it was unclear when the last of the trucks with 2009 engines — the last generation without the new pollution-control technologies — would roll off assembly lines.

“Some OEMs might have pre-mandate units that go into the second quarter,” said Kenny Vieth, partner and senior analyst with ACT Research. “Other OEMs, by the time they get through the first quarter, they’ll be done with the pre-mandate allocations.”

Under the phase-in rules for the U.S. Environmental Protection Agency’s latest emission cuts, truck makers may sell pre-mandate trucks after Jan. 1, if they are filling orders received last year.

Besides the demand for 2009 model-year vehicles, the trucking industry is still hampered by overcapacity, which has stalled buyers from scooping up new tractors.

“While things are improving rapidly in the marketplace, we still are working in an overcapacity situation,” Vieth said. For at least the next couple of quarters, the industry should be able to consume the capacity overhang.”

However, by the end of the year, “we’re going to quickly transition from excess capacity to not enough capacity,” Vieth said.

The head of a Texas International dealership also detected hints of impending demand in the heavy equipment market.

“I think there’s a lot of pent-up demand,” said Duane Kyrish, president of Longhorn International Trucks, a chain of dealerships in central and south Texas. “There are a lot of people driving old trucks” that soon will have to be replaced.

Ellett and Kyrish noted that buyers will have to work through an inventory of used trucks before demand for new tractors takes off, and Ellett said that “used truck [prices] have picked up.” Kyrish said that a recovery with some steam behind it is unlikely until “late 2010, and possibly as late as next year.”

Representatives of Daimler Trucks North America, Paccar Inc., Volvo Trucks North America and Mack Trucks declined to comment for this story.

Roy Wiley, a Navistar spokesman, reiterated projections from his company’s latest earnings report that the Warrenville, Ill., manufacturer would lock in about 25% of the Class 8 market this year.

Only two truck brands lost market share in February, according to Ward’s data. One was Daimler Trucks North America’s discontinued Sterling brand. The other was Paccar Inc.’s Kenworth.

Daimler remained at the top of the heap, capturing 34.7% of the North American market in February, Ward’s reported. The Freightliner brand alone accounted for 33.5% of monthly sales. Freightliner sales improved dramatically from February 2009, up just more than 86%.

Daimler’s Sterling brand, which is no longer in production, sold only 32 trucks last month, almost a 90% year-over-year drop. Western Star, Daimler’s severe service line, sold 63 trucks in February — enough to beat the February 2009 total of 46.

Navistar Inc., maker of International trucks, locked in 26.3% of total North American sales last month.

Paccar, which makes Kenworth and Peterbilt trucks, had 21.7% of the market in February. Peterbilt sales accounted for 11.9% of the market last month, the third highest tally for any individual nameplate. Kenworth, the other Paccar brand, had 9.8% of the market.

Volvo AB, maker of Volvo and Mack trucks, had 17.3% of the market.

Staff Reporter Frederick Kiel contributed to this article.