A big shift is taking place among used truck buyers, one that's ramping up demand for aerodynamic trucks spec'd for fuel economy at the expense of classic long-hood conventional trucks sporting big horsepower engines.
“We're seeing a lot more action where aerodynamic tractors are concerned now, while people are parking traditional-styled owner-operator trucks,” Terry Williams, editor of The Truck Blue Book, tells Fleet Owner. “It'll be interesting when we compile our October valuations to see how much the price gap has closed between aerodynamic and traditional trucks — if a gap exists at all anymore.”
“Buyers want more fuel-efficient trucks now,” adds Carl Heikel, CEO for Arrow Trucks. “Owner-operators and fleets alike are looking for aerodynamic trucks with major components spec'd for lower fuel consumption. The big square truck with high horsepower engines has lost a lot of value.”
“It's a paradigm shift all related to fuel prices,” says Drew Backeberg, vp-marketing for Daimler Trucks Remarketing, which supports the SelecTrucks used equipment brand. “Customers now more than ever are focused on fuel-efficient vehicles, which is hurting the value of classic ‘long and tall’ trucks. We don't think the market's memory is going to be short term going forward. We don't think buyers will go back to buying long and tall after this.”
A WELCOME SHIFT
For several of the big OEM-backed used truck operations, this is a welcome shift. The inventory for both Arrow Trucks (owned by Volvo Trucks North America) and SelecTrucks (owned by Daimler Trucks North America) are heavily weighted in favor of aerodynamic-styled fleet tractors, so both stand to make big gains should the model shift now occurring among Class 8 used truck buyers hold true.
“About 95% of our inventory is predominantly aerodynamic trucks,” says Richard Simons, gm-south region, for Daimler Trucks Remarketing. “We think, going forward, this puts us in a good position.”
Increasing exports of used trucks to places such as Russia, Africa and the Middle East are also helping balance out the domestic market to a degree — softening what could have been a much harder landing for used truck dealers as a result of high fuel prices and a slowing freight market. Three or four years ago, used truck exports ranged between 3,000 and 4,000 units. Last year, exports rose to over 40,000.
“The growth in exports has normalized or balanced out the used truck market here in the U.S.,” says Daimler's Backeberg. “Typically, when you have a market downturn, you have an oversupply of used trucks. But because of strong exports, it's helped balance our supply and pricing to a degree.”
“There's a lot of demand overseas for used trucks right now,” says Arrow's Heikel. “One huge advantage we have is the value of the dollar is down. That's really making our products attractive; it's a huge price advantage.”
That's not to say the used truck market is doing swimmingly by any means. “In general, on the retail side of our business, sales are mirroring what's going on in the new truck side of the business — they are down about 30%,” Heikel stresses. “High fuel costs, freight prices that don't adequately cover operating costs, and the credit crunch are creating a lot of difficulties for buyers. But the market is still doing reasonable well — it's not great, but it's not horrible.”
“It's pretty tough but we're moving some iron,” adds Richard Holmes, a salesman with an Arrow Truck Sales dealership in Elizabeth, NJ. “We're finding that private fleets and moving and storage companies are doing a lot of the buying now.”
“Activity is down but business is still steady,” notes The Truck Blue Book's Williams. “There hasn't been a collapse in the used truck market; they are still selling equipment.”