Class 8 truck sales remain strong, may delay slowdown predictions

Robust May sales of Class 8 trucks on the U.S. market pushed the 2023 year-to-date total to the highest mark since 2006, according to data received from Wards Intelligence. Manufacturers reported selling 24,111 trucks in May — 6% more than in April and 16.4% more than in May 2022.

The production slowdown predicted for the second half of 2023 doesn’t show any sign of starting early. In fact, it may be delayed into the fourth quarter, or even into 2024.

Orders for new tractors trailed sales by a wide margin, but that’s not unexpected this time of year. FTR Intel reported preliminary Class 8 orders for North America at 13,600, a 9% increase over April orders. In May 2022, orders were only 2% higher. May 2023 orders were still below replacement demand levels, according to FTR’s report.

FTR noted that total North American Class 8 orders for the past 12 months were 298,700; that’s an average of 24,892 per month. The resulting backlog of orders filled every build slot at OEM manufacturers for the remainder of 2023. The 2024 order slots haven’t been opened yet, so low order totals are to be expected. Build slots for the following year usually opened in August or September. By then, the experts may have a better view of the predicted economic slowdown and carriers will adjust orders accordingly.

“Fleet demand for equipment does not appear to be waning as they still want to take delivery of new equipment,” said Eric Starks chairman of the board for FTR. “Strong backlogs are keeping build demand strong, and FTR doesn’t anticipate any negative impact on build activity due to the recent order activity.”

Despite slowdowns in freight availability and declining freight rates, carriers have been able to keep trucks rolling profitably. The low number of order cancellations would seem to indicate they will be needing the trucks still on order.

ACT Research reported 15,500 Class 8 orders for May. The higher number than other reports may be due to differences in reporting process, but the result is the same.

“Orders were expected to moderate into Q2 and remain at relatively soft levels into mid-Q3. May orders were in line with this view,” said Eric Crawford, vice president and senior analyst for ACT.

In its “North American Commercial Vehicle Forecast,” ACT predicted new Class 8 sales will end 2023 slightly higher than 2022, reflecting stronger momentum going into the third quarter. Since new Class 8 sales in the U.S. are already more than 21,600 ahead of last year’s pace (nearly a whole month’s extra), there’s room for some declines in the remaining months of 2023.

ACT President and Senior Analyst Kenny Vieth was positive.

“We are encouraged by the economy’s resilience as evidence that the economy’s chances of dodging a recession accumulate,” Vieth said. “While the expectation is for tepid growth in the near term, it is an improvement from torpid.” ACT is no longer projecting a recession.

There’s good news in that used trucks are becoming more available and prices are coming down — but that’s small consolation if freight levels don’t pick up. ACT reported a 31% decline in average pricing from April 2022, along with a 2% decline in age.

“With inventory on the rise and, more importantly, not a limiting factor for sales, the logical conclusion is that demand is softening,” said Steve Tam, vice president of ACT. “This is a plausible explanation, especially given waning economic and freight conditions.”

Freightliner reported sales of 9,368 for May, 9.2% ahead of April sales and 28.2% better than May 2022. For the first five months of the year, the company has sold 28.3% more trucks than in the same period of 2022, compared to the industry average of 24.2%.

Freightliner-owned Western Star is at the other end of the market share spectrum but reported a relatively “outstanding” month with May sales of 737. That number was 50% higher than April and 44.2% higher than May 2022. For the year to date, however, the company is just 2.7% ahead of last year’s pace, the smallest increase of any of the OEMs reporting.

Navistar is having the most-improved sales year of all the OEMs, reporting sales of 3,232 in May. That’s a 6.1% increase over April and 15.5% better than May 2022. So far for 2023, International sales are 49.5% better than at the same point last year, and the company’s share of the U.S. Class 8 market has grown from 11.7% to 14.1%.

Kenworth sales of 3,200 were just 0.3% better than excellent April numbers and 14.2% higher than May 2002 sales. Peterbilt’s 3,501 sold in May represented a 5.5% increase from April but just 3.7% from May 2022. For the first five months of 2023, Peterbilt has sold 13.2% more trucks than in the same period of 2022.

Volvo reported May sales of 2,471, a decline of 3.1% from April, making it the only OEM to show a decline in the month. Compared to May 2022, sales dropped 2.9%. For the year to date, however, Volvo sales have increased 8.9%. Sibling Mack Trucks has fared somewhat better, with sales of 1,572 in May — an increase of 2.3% over April sales and 14.6% ahead of May 2022 sales. For 2023 to date, Mack is 25.1% ahead of last year’s pace. Its share of the U.S. Class 8 market is 6.4%, right where it was at the same time last year.

At some point, freight rates will bottom out and the economy will do the same, either by going through a small recession or narrowly avoiding one. Once the economy grows again, freight levels will pick up, rates will rise, and buyers will order more new trucks to take advantage. How soon it happens will be debated among competing analysts and economists.

Cliff Abbott is an experienced commercial vehicle driver and owner-operator who still holds a CDL in his home state of Alabama. In nearly 40 years in trucking, he’s been an instructor and trainer and has managed safety and recruiting operations for several carriers. Having never lost his love of the road, Cliff has written a book and hundreds of songs and has been writing for The Trucker for more than a decade.

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