FTR said North American Class 8 truck net orders fell for the third consecutive month to 15,800 units in March – the lowest level for Class 8 orders since September 2012, according to the firm.
FTR pointed out that March orders were 12% below February and down 37% year-over-year, which is the weakest month of March in six years, and are expected to remain under 20,000 units for the next few months as the market bottoms out.
Kenny Vieth, ACT’s president and senior analyst, noted that the decline in Class 8 orders in March results from a “weak freight rate environment, weakness in late-model used truck values, and excessive new vehicle stocks.”
Don Ake, FTR’s VP of commercial vehicles at FTR, added that “fleets are being very cautious in the current uncertain economic environment” as freight has slowed due to what he called a “manufacturing recession.”
Some fleets are also delaying replacing older units until conditions improve, he noted. “There are very few dealer stock orders, since inventories are sufficient and OEM lead times are short,” Ake pointed out.
“As a result, OEMs continue to reduce production rates in response to an expected 26% drop in build this year,” he pointed out. “Inventories remain high and retail sales have moderated, so order rates should remain subdued in the short-term. Manufacturing is expected to improve soon and this is expected to increase freight levels and stabilize truck demand.”
On the medium-duty side of the truck ledger, however, a different pattern is emerging, according to ACT’s Vieth.
“In the case of medium-duty demand, a decent jobs market and rising incomes continue to support discretionary spending and improved housing activity,” he said. “For medium-duty vehicles, the slow but steady rise in the order trend remained evident in March, with orders rising 4% against a tough year-over-year comparison.”
Vieth added that medium-duty “order strength” through the first quarter continues a period of meaningfully stronger orders which began last September.