Chris Patterson, president and CEO of Freightliner LLC, believes new truck sales will remain depressed as higher sticker prices to cover mandated emission reduction technology combined with a stagnant U.S. economy as keeping buyers away.
“It’s been a disappointing and stressful year across the North American region,” said Patterson, speaking at the unveiling of sister company Detroit Diesel Corp.’s new DD15 engine in Redford, MI, last week.
“The high cost of 2007 emission compliance convinced many to purchase large numbers of trucks in 2006 so they could defer purchases in 2007,” he noted. “A weakened U.S. economy has also prolonged the drought of new truck orders.”
Lower freight volumes resulting from the economy’s overall sluggishness also convinced fleets to put off buying new equipment. According to consulting firm FTR Associates, truck ton-miles are forecast to decline 2.2% in 2007 and rise only a miniscule 0.7% in 2008. “We expect slowing retail sales will restrain U.S. domestic volume growth” for the rest of 2007, noted Scott Davis, vice chairman and CFO for United Parcel Service, in the carrier’s third quarter earnings report.