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With few build slots open, trailer orders subdued

May 21, 2019
April projections from ACT and FTR are down year-over-year as fleets already eye 2020 build slots.

Preliminary trailer orders for April 2019 remained soft for the second consecutive month, according to two industry research firms that track sales.

ACT Research’s initial estimate was 14,500 orders for the month; while FTR estimates even fewer orders. The 13,200 trailer orders reported by FTR is 40% fewer than the same month in 2018. 

However, the low order level does not in any way reflect a softening of demand, it could be because many large OEM’s have filled their order boards for 2019. Backlogs remain hefty, with robust production levels, according to FTR’s initial report, which notes that trailers orders for the past 12 months now total 364,000 units.

“We expect the backlogs to remain very healthy, supporting continued high build rates,” said Don Ake, FTR vice president of commercial vehicles. “Orders likely will stay at low volumes through the summer, or until OEMs open the 2020 order boards. OEMs have been cautious about taking longer-term orders due to uncertainty over future costs. Right now, the Chinese tariff situation is just adding to an already cloudy outlook.”

ACT says its 14,500 unit projection for April should be within +/-3% of the final order tally.

“Order volume was soft in April for the second straight month,” said Frank Maly, ACT’s director of cv transportation analysis and research. “Several factors appear to be in play. OEMs continue to be reticent to fully open 2020 order boards. This is evident in our measurement of the extent of the industry’s backlog, which has remained in the November or December timeframe throughout the first four months of 2019.”

While down slightly from March, production continues at a brisk pace, although material/component availability and staffing continue to challenge OEMs, according to ACT. Seasonal patterns called for a slight increase for April production, so that small sequential decline likely confirms the impact of the aforementioned headwinds.

“While we hear comments of some fleets anxiously awaiting the chance to snap up 2020 build slots, some also appear to be evaluating their existing commitments,” Maly said. “Cancellations in April were the highest since August 2016 on both a unit and percent of backlog basis, and have remained elevated since December. That resulted in an interesting dichotomy in April orders; while new orders were actually up versus March, cancellations were significant enough to pull the net order number into the red month-over-month.”

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