Truck Sales Decline 14.2% in Ninth Consecutive Drop

This story appears in the June 17 print edition of Transport Topics.

U.S. retail heavy-duty truck sales declined 14.2% in May, marking the ninth straight month of year-over-year contraction, according to WardsAuto.com.

Sales totaled 15,460, down from 18,012 a year ago.

For the year to date, sales have dropped 14.5% to 69,911 big trucks from 81,762 at the same time last year, the firm reported June 13.

On a consecutive monthly basis, sales slipped 1.2% from April’s level of 15,646.

Six of the seven major truck makers posted declines for the month. Only Western Star Trucks, the nation’s smallest manufacturer, posted a gain in May.

By contrast, North American orders for new heavy trucks have been growing at a solid pace and are up by around 30%, year-over-year, during the past two months.

Original equipment manufacturers preferred to emphasize orders, expressing confidence they will turn into sales in the near future.

“We are optimistic that the [traditional] summer slowdown will not be as steep as in 2012, and we are aggressively promoting our best-in-class solutions that provide customers an overall lower cost of ownership,” said David Hames, a Daimler Trucks North America general manager, adding that DTNA’s April and May orders were strong.

DTNA is the only truck maker to have gained sales this year, relative to 2012, even though its Freightliner Trucks label dipped for the month by 4.3% to 5,291 Class 8s from 5,529 a year ago. The five-month volume is up 6% to 27,489 units.

Freightliner has gained 7.6 market share points, now selling 39.3% of the nation’s big trucks through May 31.

Much of Daimler’s gain has come at the expense of Navistar Inc., where International brand sales plunged 41.9% for the month to 1,938 big trucks from 3,337 the previous June. Cumulative sales are down 36.8% to 10,011 vehicles.

Navistar dropped to fifth place for the month from second place in April. CEO Troy Clarke attributed the falloff to the company’s changeover in engine technology.

“As for sales and share, we knew that the second quarter would be the [fiscal] quarter where we transition our new engine emission strategy. We knew we could get to a point where our potential customers might not want to buy the last EGR product or the first SCR product,” Clarke said during a June 10 earnings call.

“We have said [market] share would increase in the second half of the year or sales volumes would increase throughout 2013. Frankly, we have met or exceeded so many goals we’ve set for ourselves, we thought that progress would come faster. It didn’t, but it is coming,” Clarke said.

Navistar’s five-month market share dropped by 5.1 points to 14.3%.

The two Paccar Inc. brands took second and third place for the month, with Kenworth Trucks selling 2,356 big trucks, down 12.9% from 2,704 a year ago. Year-to-date sales dropped 24.4% to 9,208 units.

Peterbilt Motors sales fell 14.3% for the month to 2,217 from 2,586. Cumulative volume dropped 19% to 9,330 vehicles.

A Kenworth spokesman declined to comment, and Peterbilt did not respond to a request for comment.

Volvo Trucks kept its decline minimal, shedding 5.4% of monthly volume to 2,004 heavy trucks from 2,118. Five-month sales dropped 18.5% to 7,106 vehicles as the OEM took fourth place for the month.

“Replacement demand remains the primary driver of Class 8 sales,”  Volvo spokesman Brandon Borgna said. Remote diagnostics technology and in-house integrated powertrains have been appreciated by customers, Borgna added.

Mack Trucks, also a part of Volvo Group, finished sixth for the month as sales slipped 11.1% to 1,355 units from 1,524. Year-to-date volume dropped 17.6% to 5,427 Class 8s.

“Relatively strong industry order intake levels, driven primarily by replacement demand, continue to point to a better retail environment moving through the second half of the year,” Mack Vice President John Walsh said.

Western Star sales surged by 39.3% for the month to 298 big trucks from 214. Sales for the first five months are up 38.6% to 1,326 units, representing 1.9% of the year-to-date market.

Other than DTNA’s two nameplates, none of the other brands has gained market share this year.

Several truck dealers have said in recent months they have benefited from sales to the domestic oil and gas industry, but sometimes volumes can move the other way.

Near Grand Junction, Colo., a branch of the Jackson Group has seen its sales of Peterbilts plummet, said Lee Sawin, manager of new truck sales. Western Colorado’s oil and gas business has largely closed and moved to North Dakota or Texas, Sawin said.

In 2012, his branch sold 39 new trucks. Prior to the recession, annual sales would have ranged between 150 and 200 new trucks.

Sawin says this slump will eventually stop, but he does not know when and finds planning difficult for his branch because his customers remain unsettled.

“I listen for what they will be spending on capital improvements, and they don’t know,” Sawin said.