New And Used Class 8 Truck Orders Heading In Opposite Directions

Little Rock, Arkansas – Class 8 new and used truck sales are going in opposite directions according to recent data from FTR and ACT Research.

Preliminary used Class 8 volumes (same dealer sales) improved moderately in January, rising 4% month-over-month, following two sequential declines, according to the latest preliminary release of the State of the Industry: U.S. Classes 3-8 Used Trucks published by ACT Research.

However, the report indicated that longer-term comparisons yielded a 19% decline compared to January 2018. Other data released in ACT’s preliminary report included year-over-year comparisons for January 2019, which showed that average prices rose 10%, while average miles were relatively flat (-2%) and average age was higher.

 

New Orders Plummet To Lowest Level Since October 2016

Last week FTR reported preliminary North American Class 8 new orders for January 2019 dropped 26% M/M to the lowest since October 2016 at 15,600 units, while ACT Research tallied the preliminary number at 15,800.

This year’s January order activity was down 67% versus last year and is the worst for the month since 2010. The low Class 8 order number was not entirely unexpected, as the great majority of fleets already have all their orders in for 2019 and don’t need to place any more orders for a while.

Backlogs are expected to fall, but should remain over 70% higher than a year ago.  Class 8 orders for the past 12 months have now totaled 402,000 units.

Don Ake, FTR vice president of commercial vehicles, tried to put the declining order totals in perspective. “Orders had to fall below 20,000 units at some point,” he said. “There were record breaking orders placed last July and August, and this is the payback for that volume. Even with the weak January numbers, over 330,000 trucks have been ordered in the last nine months, so demand for trucks in 2019 remains strong.”

 

Change Is Afoot In U.S. Class 8 Market

According to Steve Tam, Vice President at ACT Research, changes are coming to the U.S. transportation market. “Our analysis suggests change is afoot in the transportation arena, as well as the new and used vehicle markets.” He continued, “Dealers need to remain vigilant, closely monitoring their markets for signs of change.”

Ake’s analysis of the Class 8 market was a bit different noting the market is at “more of a resting point than a turning point,” because there is “an enormous amount of orders in the backlog.” He said the key will be how many trucks get built and when. Ake reassured, “The fundamentals of the economy and freight growth remain solid, so there is no reason to panic.”

 

(featured image courtesy of Kenworth)

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