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August 23, 2010 8:00 AM, EDT

New Class 8 Registrations Rise

Overall Truck Supply Dips
By Frederick Kiel, Staff Reporter

This story appears in the Aug. 23 print edition of Transport Topics.

U.S. registrations of new Class 8 trucks increased 7.8% in the second quarter compared with the same 2009 period, but failed to keep up with equipment retirements, as the total of heavy-duty trucks registered in June declined slightly from last year, according to R.L. Polk & Co.

New Class 8s registered in the quarter totaled 26,347, while total heavy vehicles registered in June amounted to 3.62 million, down from 3.64 million a year ago.

Registrations of all commercial vehicles, in Classes 3 through 8, rose nearly 11%, Polk’s Commercial Vehicle Solutions division said in its report on the second quarter.

The gain in new registrations “is significant in that it marks the first time since the start of the decline” in 2007 that the “market has had three consecutive months in which new registrations exceeded the comparable month in the previous calendar year,” according to Polk’s survey.

However, as with heavy-duty trucks, the total number of all registered commercial vehicles fell slightly to 11.75 million from 11.76 million last year.

Polk cautioned that the 2010 increase comes against a very weak first six months of 2009, the lowest first six-month total Polk has seen since 1991.

“We’re projecting that registrations of new commercial vehicles will be up 7% or 8% for the year over 2009,” Gary Meteer, Polk’s senior account director for its commercial vehicle division, told Transport Topics. “We’re not saying it’ll be a stellar year, just better than the worst year we’ve seen since the early 1990s.”

Meteer said, however, that the increases were “positive for an economy that’s not exactly knocking them dead.”

ACT Research Co. reported on Aug. 18 that July net orders of Class 8 commercial vehicles totaled 11,667 units, 27% below June, but up 27% over last year.

“The momentum in Class 8 demand is still increasing as trucking company profitability continues to rebound strongly,” Kenny Vieth, senior analyst at Columbus, Ind.-based ACT Research stated.

Polk’s report said that Class 8 registrations have risen every month this year over the comparable months in 2009, except for May, which showed a minor decline. June’s number was nearly flat, with 8,606 new Class 8s registered, compared with 8,569 last June.

Wardsauto.com has reported that 8,896 new Class 8s were sold in June, 11.1% higher than in 2009, and 27.8% over July (8-16, p. 1).

Meteer said that all reports — orders, sales and registrations — provided valuable information to the industry, in different ways.

“Orders are for future delivery that could be as far away as 2011, and sales data could include purchases by new truck dealers who are restocking their inventory, as well as other reasons,” Meteer said. “Polk’s registration data counts only those vehicles that are actually put into commercial use in the United States.”

Polk projected from its latest data that about 110,000 new Class 8 trucks would be registered this year, up from 101,200 in 2009. Through the first six months of 2010, 53,430 new Class 8s have been registered.

“We see the back-end of this year as pretty much a repeat of the first six months,” Meteer said. “There is a pattern that won’t deviate much, which had about 8,000 to 9,000 new Class 8s registered each month during the first half of the year, and our data suggests that the final six months will be probably about the same.”

Kyle Treadway, chairman of the American Truck Dealers association, shared Meteer’s outlook of a difficult near-term.

“Across the country, dealers have been seeing small, incremental increases in new truck sales,” Treadway, president of Kenworth Truck Sales, which has 20 locations in six states, told TT. “Sales are still at lower levels than previous peak periods, but the tide has turned, and we’re all pleased.”

He added, however, that “the recovery will not be smooth or consistent, but rather a jerky kind of escalation.”

W.M. “Rusty” Rush, chief executive officer of Rush Enterprises Inc., a Peterbilt and International dealer, agreed with Polk’s forecast.

“General economic uncertainty continues to impact the Class 8 truck sales market,” Rush told TT. “Our customers have worked through excess truck capacity but remain hesitant to take delivery of new trucks.”

He said that customers were beginning to gain confidence and were receptive to the higher prices of new 2010 emissions-compliant engines.

Rush said that he believed new Class 8 sales for 2010 would fall in the range of 105,000 to 110,000 vehicles.

“If confidence continues, we could see U.S. retail Class 8 truck sales in 2011 reach 160,000 to 180,000 units,” Rush added. “We also expect strong U.S. Class 8 retail truck sales to continue throughout 2012 and 2013, which we believe could be markets of 200,000 or more units.”

Polk said that registrations of new Freightliner trucks increased 26.5% in the first half of 2010 over last year; Kenworth registrations rose 19.7%.

Mack registrations gained 17.3% and Volvos increased 11.7%. Navistar Inc.’s International trucks rose 11.4% and Peterbilt registrations were up 9%.

Polk said that International remained the segment leader with 25.4%, with Freightliner right behind at 24.7%.

“Importantly, Freightliner increased their share of [Class] 8 vehicles 3.6 share points from the level of penetration achieved during the first six months of . . . 2009,” Polk said. ACT Research reported Aug. 18 that July net orders of Class 8 commercial vehicles totaled 11,667 units.