Light/Medium Market: What pre-buy?

Pre-buying of commercial trucks ahead of the 2007 emissions rules is not a consistent phenomenon up and down the GVW scale. Standing on the brink of next year, the long predicted pre-buy of Class 8 trucks is evident in the sales figures

Pre-buying of commercial trucks ahead of the 2007 emissions rules is not a consistent phenomenon up and down the GVW scale. Standing on the brink of next year, the long predicted pre-buy of Class 8 trucks is evident in the sales figures. October 2006 Class 8 sales in the U.S. totaled 25,069 as compared to 22,335 in October of 2005, according to Ward’s Automotive Group (www.WardsAuto.com). January through October, Class 8 sales were a solid 12.6% ahead of 2005.

While many buyers of heavy-duty trucks seem determined to delay their encounter with the new technology and the higher costs of the 2007 models as long as possible, their pre-buy strategy is not necessarily the strategy of choice for buyers of lighter duty trucks.

The total light-duty market in the U.S. for January through October 2006 was 7,287,047, down 6.6% from the same period a year ago, according to Ward’s. Medium-duty sales for 2006 YTD are up, but much less than Class 8 sales, 7.4% over 2005 figures, and total truck sales for 2006 January through October are off 5.7% as compared to the same period in 2005.

“We had all anticipated that there would be a major pull-ahead, a pre-buy, in 2006, but there was not,” observed Todd Bloom, marketing vp for General Motors Isuzu Commercial Truck of America, Inc., a supplier of light- and medium-duty trucks to the U.S. market. “Our own sales are up over last year and we are hoping to see a very strong fourth quarter, but we still expect to have quite a number of vehicles with pre-2007 engines on dealer lots well into next year.

“There is a business slowdown taking place in some sectors and the price of fuel has skyrocketed this year,” Bloom added. “That has been especially hard on private and vocational fleets.”

Robert J. Aquaro. vp of product assurance for Mitsubishi Fuso Truck of America, also a light- and medium-duty truck supplier, is not seeing a significant pre-buy, either. “We are not really seeing a big pre-buy,” he says. “We have a couple of customers who have bought more equipment than usual perhaps, and we are having a good year generally, but I don’t think it is because of the 2007 emissions standards.

“Heavy-duty buyers are truckers,” Aquaro continued. “Light-duty buyers tend to see trucks as another tool they need for their business. They buy trucks when they need them, whenever that happens to be. Even medium-duty buyers are not as affected by EPA ’07; their focus is elsewhere, on other aspects of their business.

“Our model year changeover always takes place in mid-year,” Aquaro added, “and next year will be no exception. The new engines will be installed beginning with our model year 2008 trucks, which will be available sometime in the late spring or early summer of 2007. There will still be model year 2007 trucks available for at least part of next year, too, which means that our customers will have a choice as long as those trucks last.”

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