Class 8 truck market ‘at a turning point’: FTR

Class 8 truck orders in Auust were 80% lower than a year ago, but up 4% from July, according to preliminary data from FTR. Orders totaled 10,400 units, and have been averaging 11,000 per month since May. FTR says OEMs have built through much of the backlog created by record orders in 2018, and that fleets are in no hurry to order for 2020 deliveries.

FTR expects large fleets to place their orders for 2020 in the fourth quarter, anticipating ample build slots. “The Class 8 market is at a turning point,” said Don Ake, vice-president, commercial vehicles with FTR. “The huge orders in 2018 supported the robust production last year and through much of 2019. Now the economy has slowed and there are enough trucks to handle the available freight growth.

OEMs are cutting production rates, eventually down to near replacement demand levels.” “There is a tremendous amount of uncertainty in the economy right now due to tariffs and the trade war with China,” Ake added. “Businesses are holding back on capital investment and our industry is no exception. Fleets are going to be cautious about buying new equipment in the short term.

We do expect orders to increase in October. However, if freight growth is still muted and manufacturing sluggish, the big fleets may just place orders for Q1 and take a wait and see approach.” ACT Research reported preliminary Class 8 orders at 10,900 units, a tick above FTR’s count.

“Weak freight market and rate conditions and a still-large Class 8 backlog continue to bedevil new Class 8 order traffic,” said Kenny Vieth, president and senior analyst of ACT. “Though, with OEMs opening their new model-year order books, order weakness is increasingly the story of an overcapacitized Class 8 fleet, as truckers start to make their plans for 2020.”

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