Truck orders may be down, but truck sales continue to roll in 2019.
FTR reported this week Class Eight preliminary U.S. retail sales set a record last month at 28,200 units, four percent higher than the previous record of December 2006. Sales were up 20 percent month over month and 20 percent year over year, with all OEMs reporting robust activity for the month, FTR states.
FTR says sales had been strong and steady for the previous five months and September was expected to be similar. The record activity was a surprise, even more so with fewer sales days in the month. Despite slowing freight growth, some fleets are still expanding and need more trucks.
Sales were also boosted by fleets taking delivery of some large orders that had been sitting on OEM lots during the summer. In addition, carriers have cash to spend to replace older units. Reports indicate some OEMs are offering discounts to reduce record-high inventories, so now might be the ideal time to trade trucks in, FTR reports.
Sales are expected to pull back considerably in October and November as the industry adjusts to the softer freight environment. FTR expects sales volume to drop more than 20 percent in 2020.
“September should be considered a fluke as fleets delayed taking some deliveries in the summer and the sales all closed in September. Still, it was great sales month for Class Eight trucks,” says Don Ake, FTR vice president of commercial vehicles.
“It will be a much tighter market going forward as fleet expansion slows due to the weaker freight environment. The market is slipping back to replacement level, but fleets are still profitable, so this should stabilize sales,” Ake says.