US Class 8 Sales Fall in March, Hit 16th Straight Y-O-Y Decline

John Sommers II for Transport Topics

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

Class 8 retail sales fell again in March for the 16th consecutive month of year-over-year decline, although there were gains among vocational trucks.

WardsAuto.com reported April 12 that U.S. fleets and owner-operators bought 14,793 heavy trucks for the month, a 26.2% decrease from the 20,034 sold in March 2016. The last time there was a year-over-year sales increase for a month was November 2015.

Of the seven brands, only Volvo Trucks North America had a gain for the month.

For the first quarter, the industrywide decline was 28.8% to 36,937 vehicles from 51,859 in the same period last year. All seven brands posted declines for the quarter.

“We’re having an increase on the vocational side … but that’s only 25% to 30% of the whole market,” said David Kriete, president of his family’s Kriete Group, based in Milwaukee.

He said the current sales climate is not bad on an absolute level, the way 2009 was, but it is disappointing relative to the “banner year” of 2015.

Last year was difficult for dealers, he said, because the optimism of 2015 led to bloated inventories in 2016 that had to be financed as sales dropped. With much of that glut cleared out, Kriete said 2017 will be much easier even if sales do not rise significantly.

His sales staff is moving dump trucks, mixers, refuse haulers, concrete pumps and roll-on/roll-off trucks, about 5% to 15% more than last year, depending upon the type, he said.

Those are the Mack trucks on his lot, which are doing better than the Volvos that are mainly for highway hauling.

Analyst Kenny Vieth, president of ACT Research Co., said he thinks the over-the-road drought might be ending soon.

“We’re seeing not just green shoots, but they’re putting down healthy roots, too,” Vieth said, basing his estimate on how sales follow orders.

“From March 2015 to October 2016, we had 20 straight months of year-over-year declines in net orders,” Vieth said. Four of the next five months have posted gains in orders; therefore, the first month with a sales gain should be around May or June, he said.

Robert Nuss, whose family dealership is based in Rochester, Minn., whose construction sales are up, said he is looking for better used-truck prices. An increase there would be a good sign of a healthier tractor market.

“We’re seeing a few more indicators there, but used prices have taken a toll,” he said, adding that it is hard for fleets to buy new trucks if they can’t get good trade-in prices for used vehicles. Nuss also is a Volvo and Mack dealer.

Among the brands, Freightliner Trucks, the flagship of Daimler Trucks North America, kept first place for the month but also took a significant pounding. The company sold 5,322 Class 8s, down 37.8% from the 8,562 sold in March 2016. Quarterly sales plunged 37.6% to 13,709 units.

Freightliner’s first-quarter market share lost 5.3 percentage points to 37.6% from a rate of 42.4%.

The two Paccar Inc. nameplates took the second and third places, respectively, for the month and the quarter.

Peterbilt Motors Co. sold 2,192 big trucks, a 5.8% decline from the 2,327 the previous March. Year-to-date sales are down by 11.3% to 5,870 vehicles, but the manufacturer added 3.1 points of first- quarter market share to 15.9%.

Kenworth Truck Co. dealers sold 2,112 heavy trucks, down 27.8% from 2,926, year-over-year. Three-month sales dropped 32.1%, year-over-year, to 4,631 units. Quarterly market share eroded by 0.6 point to 12.5%.

The Volvo Group manufacturers took fourth and fifth places.

Mack sold 1,658 Class 8s, down 13.6% from 1,918 in the year-ago month. Quarterly sales were down 11.9% to 3,833 vehicles, but the company added 2 market-share points to 10.4%.

Volvo’s 11.7% gain was unique in March, as sales grew to 16,40 units from 1,468. The three-month volume dropped 12.9% to 3,866 heavy trucks. Market share grew by 1.9 points to 10.5% for the first quarter.

Navistar Inc. had the steepest fall in March, by 39.7% to 1,420 trucks from 2,354 in the year-ago month. Quarterly sales were off 37.8% to 4,019 units.

The market-share decline was 1.6 points to 10.9%.

Western Star Trucks, DTNA’s niche brand, sold 447 Class 8s, a 5.9% decline from 475. Quarterly sales fell 16.6% to an even 1,000 vehicles, and market share inched up to 2.7% from 2.3%.