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Class 8 orders hold steady
February Class 8 truck net orders held steady in February, at 17,650 units, ac- cording to the preliminary report from FTR. That was down only 2% from January and down 43% year-over-year. FTR noted the results are falling into
a more stable pattern. Orders have av- eraged 21,000 units over the last three months and the same average over the last 12 months. Total orders over the last 12 months have been 254,000, close to FTR’s projections.
“The order patterns are very con- sistent with the current market situa- tion. Fleets are basically finished ex- panding their truck capacity for this cycle,” said Don Ake, vice-president, commercial vehicles at FTR.
“Purchases are now for replacement demand and the average orders and ex- pected build are right at this level. We should expect orders to stay in a rela- tively tight range, around the 18,000- 20,000 unit mark, for the next several months. OEMs have made significant production cuts and look to now be right-sized for the order demand. As long as there is some freight growth, the market should be stable for the next several months. Despite the recent downturn in Class 8 demand, February backlogs are still expected to be 14% higher than two years ago.”
ACT Research reported February Class 8 net orders of 17,900 units and Classes 5-7 orders of 21,600 units.
“Orders for commercial vehicles in February largely mirrored the ongo- ing US economic narrative,” said Kenny Vieth, ACT’s president and senior ana- lyst. “Healthy consumer-related indica- tors, such as disposable income, autos and houses, continue to support posi- tive medium-duty demand. At the same time, ongoing weakness in the freight- rich manufacturing sector continues to weigh on heavy-duty demand.”
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January trailer orders fell 43% year-over- year and ACT Research says small and me- dium-sized fleets may be pulling back on their ordering activity.
“We’re hearing comments regarding slow dealer activity. Small and medium fleets continue to be cautious and are like- ly faring worse financially than their large fleet competitors. ELDs (electronic logging devices) will likely generate further head- winds for that fleet segment,” said Frank Maly, director, commercial vehicle trans- portation analysis and research at ACT.
However, he also noted large fleets are shifting more capital towards the pur- chase of new trailers because it can gener- ate greater efficiencies than buying more power units.
“We’re also seeing a pattern of continu- ing bias in fleet investment toward trail- ers over tractors,” Maly noted. “Given the price difference, a relatively small shift in dollar expenditures can generate signifi- cant returns in trailer acquisitions, and adding trailers helps support increased drop-and-hook activity, making the best use of drivers.”
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