June 22, 2015 2:30 AM, EDT

Medium-Duty Sales Rise 3% in May

GM Plans to Re-Enter Sector in 2016
General Motors Co.

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

Retail sales of medium-duty trucks in the United States edged up 3% in May, reversing a 10% decline in April, reported.

Separately, General Motors Co. announced last week it will re-enter the medium-duty truck market in 2016 through a new manufacturing agreement with Isuzu Motors Ltd. GM, which exited the medium-duty space after filing for bankruptcy protection in 2009, said it will return with a line of Chevrolet-branded low-cab-forward medium-duty models based on the Isuzu N-Series.

Meanwhile, Wards reported that sales of Classes 4-7 trucks totaled 15,724 units last month, up from 15,195 in May 2014. Sales were nearly identical to April and have risen year-over-year in 10 of the past 11 months.

Through five months, 2015 sales were 75,419 units, up 4% from the same timeframe last year, Ward’s said.

The medium-duty business remains a “healthy marketplace with good underlying fundamentals,” said Steve Tam, vice president at ACT Research.

Growth in the medium-duty sector has been much more gradual than in the Class 8 market, where sales have climbed 22% year-to-date.

ACT’s Tam said the slower but steadier growth of the medium-duty market reflects the broader variety of operators that purchase those trucks, including municipalities and local service providers.

“Medium-duty vehicles participate directly in every facet of the economy,” he said, adding that the highs and lows of those disparate sectors tend to average out.

Class 8, on the other hand, is predominantly focused on freight transportation and tends to be more cyclical, Tam said.

ACT forecasts that 2015 will be the peak year for the current Class 8 cycle, but the firm expects medium-duty production to continue growing modestly through 2020, for an average year-over-year increase of about 3.5%, Tam said.

Gary Dennis, new truck sales manager at Heritage International Trucks, said his company’s medium-duty business has been “pretty strong for most of the year,” with sales tracking well ahead of 2014 levels.

The Charleston, West Virginia-based dealership has seen solid demand from a “good mixture” of business types and municipalities, he said.

That growth has helped offset a loss of business from customers in the coal industry, which dropped off several years ago and hasn’t recovered, Dennis said.

May’s medium-duty growth was led by a 12% increase in sales of Classes 4-5 trucks, which totaled 7,437 units.

On the other hand, sales of Class 6 vehicles fell 6%, to 4,186 units.

Class 7 sales were nearly flat at 4,101, compared with 4,118 in the same month last year.

Medium-duty sales for Daimler Trucks North America’s Freightliner brand edged up 1% in May to 4,096 units, compared with 4,037 a year earlier.

Navistar Inc. sold 1,784 medium-duty International trucks last month, a 2% uptick from 1,755 a year ago.

Hino’s sales climbed 24% from a year ago, to 718 units.

Kenworth Truck Co. sold 519 medium-duty vehicles, compared with 518 a year earlier.

Sales at Peterbilt Motors Co. declined 5% to 440 trucks.

Medium-duty sales at Ford Motor Co. slipped 7% to 5,187 trucks.

Dodge Ram’s sales nearly doubled to 1,433 trucks, from 723 a year ago.

Isuzu sold 1,658 vehicles, down 7 % year-over-year.

The agreement between GM and Isuzu is the latest development in a long-term partnership; the manufacturers have been collaborating for more than 40 years.

Meanwhile, GM said its new cabovers will be produced by Isuzu and distributed by U.S. Chevrolet dealers starting next year. GM is the largest U.S. auto manufacturer in terms of units sold.

“This addition helps our dealers satisfy their commercial customers’ needs all in one place,” said Ed Peper, U.S. vice president of GM fleet and commercial sales.

The new trucks will be available in regular-cab and crew-cab body styles and come with a GM 6-liter V-8 gas engine or an Isuzu 3-liter or 5.2-liter diesel engine, depending on the model.

The gas-powered models will be assembled in Charlotte, Michigan, GM said.