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  • > Truck Demand to Slow in ‘16; Pre-Buy Watch On
Truck Demand to Slow in ‘16; Pre-Buy Watch On

Posted Friday October 02, 2015, in Business

New vehicles getting better fuel economy, the driver shortage and credit availability has led to increased truck purchases this year as fleets prefer to invest in assets rather than pay taxes on the money they make, says Kenny Vieth, president and senior analyst for ACT Research.

However, he says there seems to be some signs the market is softening. The rollback of the two overnight provisions of 34-hour reset in hours of service and the fact that there have been misses the past two months in the OEM build plan are signs that truck sales may be slowing down.

As Heavy Duty Trucking magazine reports, production reportedly outstripped orders in September.

As a result, ACT has lowered its 2015 Class 8 forecast to 328,000, and Vieth says that number could go as low as 322,000 depending on what September final numbers show.

Meanwhile, inventory to retail sales is up year-over-year to 2.5 months – meaning there are 8,500 additional units in inventory compared to last year. “Dealers are sitting on a boatload of inventory,” Vieth explained.

“(Although) we had a great first six months there is not as much quoting going on for multiple unit deals.”

However, he added  that the dealership is still getting “floor traffic” so there is still interest in trucks.

Vieth says he sees the sees the supply-demand equilibrium being neutral by the end of 2015.

Vieth says the full implications of the proposed Greenhouse Gas Phase 2 Standards are not yet apparent, but the cost of the technology will influence whether or not there is a significant pre-buy prior to the standards taking affect.

For example if the cost of compliance resulted in an increase price of $20,000 — EPA is predicting it will be $12,000 — there would be “significant market disruption,” Vieth said and likely an uptick in buying in 2019 and 2020.

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  • Tags: capacity, EPA, new trucks, pre-buy, truck sales

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The Ontario Trucking Association (OTA) was founded in 1926, and provides services and public policy advocacy for trucking companies hauling freight into, out of and within the Province of Ontario. OTA is the only trucking association in Ontario that represents all segments of the industry - for-hire carriers, private carriers, intermodal, suppliers, etc. » More...

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