Trucks should be selling better.
With strong fundamentals in place, today’s truck market should be producing more orders than currently is the case. ACT Research says it is a question of confidence, or more accurately a lack of confidence on the part of truck buyers.
“ACT Research believes that a lack of confidence by the credit-buyer side of the market is at the root of the three-month downturn experienced in the Class 8 market,” says Kenny Vieth, president and senior analyst at ACT. “If the pullback in orders was freight-related, we would have expected to see a run-up in cancellation activity, which has not been the case. This suggests to us that the problems with demand are not systemic.”
Vieth was responding to the findings of his company’s latest State of the Industry report on sales of Class 5 through 8 vehicles for the North American market.
“Smaller truckers who have to borrow to buy are most likely driving older trucks with relatively low values,” Vieth added. “Those truckers need to borrow $90,000-$100,000 to finance a new truck, but their confidence has been shaken by a number of events in early 2012, including economic concerns, a 9.5% jump in fuel prices in the first quarter of this year, and inconsistent freight early in the year.”
Vieth said that a continuation of reasonable freight growth, healthy trucker profits, and rising used truck prices are expected to support Class 8 demand once the current period of uncertainty is worked through.