New Class 8 Truck Orders Soar in May

This story appears in the June 14 print edition of Transport Topics.

New Class 8 truck orders shot up significantly in May from a year earlier, although they were down slightly from April, two independent research firms reported.

John Burton, vice president of ACT Research Co., Columbus, Ind., said preliminary data show 13,200 new Class 8 truck orders in May, an 84% increase over last May but down about 11% from 14,826 in April. Likewise, FTR Associates, Nashville, Ind., reported 12,903 net new Class 8 orders in May, up 74.7% from last May but down 9.8% from April.

The figures from both companies include the United States, Canada, Mexico and exports from North America, though they said the overwhelming number of orders was from U.S. fleets. They also said their final counting of orders could vary as much as 5% from the preliminary data but added that changes usually were much smaller.

“I just think, in general, it’s going to be choppy for the next several months as fleets decide how to replace their trucks,” Eric Starks, president of FTR Associates, told Transport Topics. He said that most of the orders “seem to be for near-term production, and so they seem to firm.”

“It tells us that the recovery is happening,” Starks added.

“The trend we’ve been seeing the last few months appears to be continuing, and our forecast for 2010 continues to look sound,” Burton told TT. “We’re forecasting that Class 8 production for 2010, not orders, will show a 19% increase over North American production in 2009, when it was 118,400,” he added.

“The drop in May from April is nothing to be concerned about,” Burton said. “For the most part, the trend is still positive. We’ve been forecasting a slight dip in midyear.”

All truck manufacturers declined to comment on the reports, but several truck dealers said they have been seeing a rise in sales and pricing over 2009.

“There has been a definite pickup in [Class 8] business; however, we haven’t seen the percentage increases the research firms are indicating,” Bill Currie, president of Inland Kenworth, based in Burnaby, British Columbia, told TT.

“We have seen slow and steady increased sales across all markets,” Currie added. Inland Kenworth operates 22 dealerships in California, New Mexico, Arizona and Canada.

“The rental and leasing market has certainly picked up, and that’s usually a pretty good indicator of overall market activity,” Currie said. “When we see the rental market picking up, the rest of the market has historically followed. Another good indicator is used truck volume, which has also displayed good numbers recently.”

George Grask, owner of Cedar Rapids Truck Center, a Peterbilt dealer in Cedar Rapids, Iowa, also was optimistic.

“The order figures from those firms seem to be accurate,” Grask told TT. “In 2009, we weren’t doing any business, so that any improvement would look good.”

He added that the decrease from April also seemed accurate, with buyers dropping out as dealers exhausted their supplies of trucks with 2009 engines, which are cheaper than 2010 engines.

“Some of the better-managed fleets are buying now,” Grask added. “They see the uptick in the economy that is going on, and they want to get prepared.”

Kyle Treadway, president of Kenworth Sales Co., based in Salt Lake City and with dealerships in seven states, also has seen an increase in activity.

“For our business, we saw an increase in orders for May over April, so that we’re an exception to the nation, if the data from those firms is correct,” Treadway told TT.

“Hearing from other dealers, there is no alarm if orders fell in May, because one month doesn’t make a trend,” said Treadway, who is also chairman of American Truck Dealers. “Overall, we’re still seeing a growth year, and we don’t see any danger of a double-dip recession.”

Jeff Mays, sales manager of the two-location Pacific Truck Center, Coburg, Ore., said that new truck orders have been slim.

“Well, we haven’t seen any buying or ordering increases in our region,” Mays told TT. “Our area is heavily dependent upon construction activity, and that sector still is not showing any return from the recession,” he added. Pacific Truck is a dealer for Freightliner Trucks, which are part of Daimler Trucks North America.