According to ACT Research, Class 8 truck sales have declined 12% in the month of August, ending the three-month streak of positive year-over-year increases.
Preliminary data provided by ACT found truck orders fell to 19,000 from 21,600 the year prior.
The research report points out that while truck orders are down, August was still the best month for truck sales in February of this year, which signals a strong economy.
“As represented by seasonal factors, the industry remains at that time of the year when expectations for order activity are low, as most of the current year’s orders have been booked and out-year build plans are only starting to open,” said Kenny Vieth, president and senior analyst at ACT. “For Class 8, August is the last month of ‘weak order season,’ the four-month period that begins in May. Adding to downward pressure, the 2023 build plan has been essentially filled since the end of Q1.”
“As build slots start to open for 2024 production, fleets are starting to place orders on the books,” said FTR Transportation Intelligence Chairman Eric Starks. “However, much of the ordering for 2024 has yet to be seen and typically will not show up until September or October. Despite rising order activity, the year-over-year comparisons will look horrible through November due to record order activity in the second half of 2022.”
“The actual unit order levels will be more significant in the near-term than the year-over-year change in analyzing the strength of the market,” Starks said. “Even though order activity is still below replacement demand, a key takeaway from the August data is that fleets are not shying away from ordering new equipment, which is a good sign for the second half of the year.”
“It’s interesting times because next year, of course, we have the wave of greenhouse gas regulations coming into effect,” said Kyle Treadway, president of Kenworth Sales Co. “It’s new rules having to balance zero-emission vehicles and diesel vehicles. So the ordering process, we’re, as an industry, inventing it as we go. Yes, we’re used to allocation. We’ve been on allocation systems for the last few years, but it never gets any easier.”
“We have CARB regulations, which are on a different time frame than EPA regulations,” Treadway said. “And so, we have to be very cautious, as an industry, of where these vehicles end up being. To certify compliance, it now means we have to, as the delivery arm for the vehicle sale, prove that these vehicles are going into certain states and meeting whatever their requirement is, whether they’re a CARB state or not. So, it complicates the delivery process.”
“We’re just in the throes right now of opening up the order boards and doing the allocation process,” Treadway said. “We don’t have end user names on specific slots yet. We don’t have pricing yet. We’re still just trying to wind things up so that when it is time to accept customer orders, we have answers to all their questions or as many of them as we can.”