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May 12, 2020 12:30 PM, EDT

Class 8 Sales Fall 47.4% in April

Still, Numbers Beat Expectations Amid Pandemic
Kenworth trucks sit on a lotKenworth trucks sit on a dealership lot. Class 8 sales for 2020 through April sat at 60,219, a 30.7% decrease from the comparable 2019 period, when that figure was 86,908. (John Sommers II for Transport Topics)

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Class 8 U.S. retail sales in April plunged 47.4% as freight demand plummeted amid the novel coronavirus pandemic, WardsAuto.com reported. But industry watchers’ expectations were for even lower sales.

Sales sank to 12,637 compared with 24,024 a year earlier, according to Wards. That was the lowest volume since 11,200 in February 2017.

Year-to-date, sales fell 30.7% to 60,219 compared with 86,908 in the 2019 period, showed the report released by Wards on May 12.

Class 8 sales graphic

“The total U.S. market in April came in a little stronger than we expected, and it will be interesting to see what will happen in May as most original equipment manufacturers are slowly restarting production,” Magnus Koeck, vice president of marketing, Volvo Trucks North America, told Transport Topics.

Industry analysts were also surprised.

“With businesses being shut down and the [Class 8] orders being low and stay-at-home orders everywhere, I was expecting a number in the U.S. below 10,000,” said Don Ake, vice president of commercial vehicles at FTR.

Steve Tam of ACT Research

Tam

Of April’s sales, he said, “Historically, that would have been a bad number [and it is] but we are in unusually bad circumstances.”

Steve Tam, vice president at ACT Research, said, “In seeing these industry numbers, it wasn’t as bad as we thought.”

At the same time, all truck makers posted sales declines of 39% or greater, with the exception of the smallest one, Western Star.

“The scope and speed of this downturn are without modern precedent, significantly worse than any recession since World War II,” Federal Reserve Chairman Jerome Powell said May 13, noting that “the job gains of the past decade have been erased.”

Truck sales follow freight demand, largely powered by consumer spending.

Class 8 sales by brand

Market shares narrowed, too.

Freightliner, a brand of Daimler Trucks North America, retained its lead with a 34.1% market share even as its sales tumbled 47.4% to 4,315 compared with a year earlier.

“Without a doubt, April’s sales were some of the worst we’ve ever seen for our industry. If there’s a silver lining to be found, it’s in knowing that the vital and continuing work of our dealers and DTNA is helping to keep our customers moving as they provide the essential goods and services that all of us and our families depend on,” said Richard Howard, senior vice president of on-highway sales at DTNA.

Peterbilt Motors Co., a brand of Paccar Inc., posted the largest decline, plummeting 59.6% to 1,553 compared with a year earlier, good for a 12.3% share.

“Our biggest focus right now is making sure that our employees are well cared for. And as we watch that and take care of that, then we’ll ramp back up our production, and we’ll align that to the demand, and we’ll see where that takes us in the second quarter,” Paccar CEO Preston Feight said in late April during a first-quarter earnings call.

VTNA, a brand of Volvo Group, had the second-highest decline in sales, diving 56.8% to 951, a 7.5% share.

Magnus Koeck, vice president of marketing for VTNA

Koeck

“The long-haul segment has come down significantly the first four months of the year, while the straight truck and vocational market is still quite strong,” Koeck said.

Mack Trucks, also a Volvo Group brand, posted a 44.8% drop in sales to 1,063, earning an 8.4% share.

“While the pandemic is significantly affecting the market, many of Mack’s customers are performing critical delivery, infrastructure and refuse collection work, and we’re continuing to meet customer demand,” said Jonathan Randall, Mack Trucks senior vice president of North American sales.

At International, a brand of Navistar Inc., sales fell 44.6% to 1,961, good for a 15.5% share.

“There is a little bit of retail activity. We are delivering some municipal stuff that has been on order for awhile,” said Matt Smart, director of fleet sales at Cumberland International Trucks, which interacts with about 25 fleets in middle Tennessee.

But the Nashville, Tenn.-based dealership has very few customers looking at growth plans; it’s primarily about replacement cycles, he said.

“The larger fleets have taken a pause, but I think they are going to be in a place where they have to replace equipment. Over the next 60 to 90 days, I think they will start looking at replacement schedules and what is going on in the used-truck market and how that impacts their typical cycle,” Smart said.

Class 8 sales graphic

Kenworth Truck Co., also a Paccar brand, reported sales fell 39% to 2,290, an 18.1% share.

“The North American industry has roughly 3.8 months of retail sales in inventory, and Paccar has less than that; we have 3.4 months retail sales through March for Kenworth and Peterbilt dealers. And of our 3.4 months, roughly half of that is at body builders. So that’s being worked on right now. And so, our inventory is in really good shape right now,” Feight said.

Western Star, also a DTNA brand, notched the lowest drop in sales, 9.7%, to 504 trucks, a 4% share.

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