October 20, 2014 4:00 AM, EDT

Truck Sales Surge 24.5%

September Total Tops Elusive 20,000 Level

By Michael G. Malloy, Staff Reporter

This story appears in the Oct. 20 print edition of Transport Topics.

U.S. retail heavy-duty truck sales continued their torrid pace, topping 20,000 in September for just the second time since 2006, reported.

The September total of 20,078 was 24.5% above a year ago and the highest since December 2011. It was also the first non-December month to see sales above 20,000 since November 2006.

The increase marked the fourth straight month in which year-over-year gains have topped 20%. Similarly, medium-duty truck sales leaped 35.5%, the biggest jump in three years, led by a surge in Class 7.

All major original equipment manufacturers reported gains in their heavy-duty sales, with three of six major brands topping 30% year-over-year growth.

“Everything is going in the right direction from the truck sellers’ perspective,” said Stephen Volkmann, an analyst with Jefferies & Co. in New York. “Orders have been running ahead of retail sales, which would lead you to believe there’s some legs here.

“This is the first time in recent memory where we have a reasonably good economy with no emissions regulations on the horizon, so I think people have had a chance to get used to the vehicles and . . . are getting the returns they had hoped for,” he told Transport Topics.

Sales reached 158,288 units year-to-date, up 19.4% from a year ago and the highest nine-month total since the record sales year of 2006.

This year’s pace is the strongest since 2006 but trails by about 50,000 units through September.

Ward’s reported that Daimler Trucks North America’s Freightliner brand held the No. 1 spot with 36% market share, up slightly from August.

Freightliner sold 7,226 trucks during August, its highest total this year and a 32.5% year-over-year increase. Along with Daimler’s Western Star brand, which sold 250 trucks, DTNA’s market share was 37.2%.

“We were extremely pleased with September’s performance, both in terms of industry growth and total DTNA market share,” said David Hames, general manager of marketing and strategy.

Daimler expects “ano-ther strong month in October as we enter the buying cycle for fleets placing orders for 2015 delivery,” according to Hames.

Navistar International Corp. held onto the No. 2 spot among brands, with 2,892 trucks sold, a 15.6% increase from a year ago. Its market share rose slightly from August to 14.4%. Navi-star declined comment last week.

Volvo Trucks’ sales jumped 38.9% to 2,477, while sister company Mack Trucks sold 1,656 units, up 7.2%. Volvo’s market share improved to 12.3% from 11.9% in August, while Mack’s slipped to 8.2% from 9.5%.

“Strong freight demand and the need to replace aging vehicles continue to drive Class 8 sales,” said Magnus Koeck, Volvo’s vice president of marketing and brand management.

“Customers continue to replace their aging vehicles with newer trucks . . . [with] significantly better fuel economy,” said John Walsh, Mack’s vice president of marketing.

He said carriers were “expanding their fleets in the current strong freight environment.”

Paccar Inc. units Peterbilt Motors Co. and Kenworth Truck Co. saw increases of 46.9% and 2.3%, respectively. Each sold about 2,790 trucks, with about 14% market share apiece. Peterbilt and Kenworth declined to comment.

Volkmann said sales were likely to continue surging into next year and that two factors commonly cited as trucking industry hurdles may be pushing truck sales higher.

“My sense is that [strong sales] will continue beyond the fourth quarter,” traditionally the strongest period of the year, he said.

“You’ll always have normal seasonality, but I think we have a couple of good years ahead of us as we try to get fleet age down and get better performing, better fuel-economy trucks into the mainstream.

“The hours-of-service [rule] has turned out to be helpful to sales — and I’m sure the truckers would cringe if they heard that — because [HOS rules] probably have removed a little bit of capacity from the system, which we’ve had to replace with some new volume,” Volkmann added.

“The driver shortage also probably helps [sales] a little, in that it helps to recruit drivers when you have a nice new truck for them to drive,” he said.