Across the truck industry, sales numbers have been dropping. Preliminary numbers are in for April, and according to both FTR and ACT Research Co., heavy-duty sales are down for the month. ACT’s preliminary numbers show 33,800 new orders from Classes 5-8 (13,700 from Class 8 and 20,100 from Classes 5-7). That’s a 16% drop from March and a 39% drop from last April. Kenny Vieth, ACT’s president and senior analyst, chalks this up to “an ongoing overcapacity narrative, a resulting weak freight rate environment, softness in late-model used truck values, and excessive new vehicle stocks.”
FTR’s preliminary data shows that Class 8 truck net orders fell for the fourth consecutive month to 13,500 units; showing a negative 16% month-over-month and -39% year-over-year comparisons and the lowest April since 2009.
“The OEMs will not be able to maintain current build rates under these order conditions,” cautions Don Ake, FTR’s vice president of commercial vehicles. “It appears more production cuts are on the way, consistent with the FTR forecast. Backlogs are quickly shrinking and are expected to fall below 2014 levels relatively soon. A big order month could stop the bleeding, but we are entering the ‘summer slump,’ so order activity will probably get worse before it gets better.”
Medium-duty orders did represent a bright spot in this otherwise dreary outlook. “Orders fell 10% sequentially from one of the best order months experienced cycle-to-date, but were up 12% compared to year-ago April orders,” points out ACT’s Vieth. Vieth said that medium-duty demand was bolstered by a decent jobs market and rising incomes, which support discretionary spending and improved housing and automotive sales activity.
