Class 8 sales softened in July

Class 8 sales softened in July

A WardsAuto.com report said retail sales of new Class 8 trucks in July totaled 22,336 units, a 6% increase over sales in July 2005

A WardsAuto.com report said retail sales of new Class 8 trucks in July totaled 22,336 units, a 6% increase over sales in July 2005. In the first seven months of 2006, sales topped off at 162,545 units, which was a 14% boost over the same period last year.

According to Chris Brady, president of Commercial Motor Vehicle Consulting, the July data indicated a softening of the new truck market, with a seasonally adjusted annualized rate of 263,970 units, down 6% compared with the annualized rate for the first seven months of this year of 280,910.

However, Brady said the second half of 2006 will likely have larger sales volumes compared with the first half. This is because trucking companies would like to delay purchasing post-’07 models for as long as possible, since their sticker prices are considerably higher than previous models because they are equipped with new emissions reduction technologies.

“In the second half I think we’ll see stronger sales compared with the first half, although not a not a huge difference,” Brady told FleetOwner. “In the first half we saw a seasonally adjusted annualized rate of 283,811 units and we may see a rate of between 290,000 and 300,000 in the second half.”

“[July is] just one month and there could it be a number of reasons it was a slower month,” Brady said. “We shouldn’t take one month as a signal of a downturn— [an annual rate of] 263,000 is still a good number and carriers earnings are relatively good in the second quarter so there’s no need to make cutbacks in investment spending if profitability is high.”

In July 2006 there were 48,616 units in stock, which according to Brady, is “imbalanced on the high end.”

“If [inventories] stay at this level in December, then it would be excessive and it would drag on truck production in the first half of 2007 because dealers would have too many trucks in their lots,” he explained. “What the dealers might be thinking is that in 2007 these ’06 engines would sell at a premium.”

To comment on this article, write to Terrence Nguyen at [email protected]

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