• Mixed bag for truck sales

    NASHVILLE– Overall truck sales are down and are probably going to stay down well into 2008, according to W. Marvin Rush, chairman of Rush Enterprises
    Dec. 5, 2007
    3 min read
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    NASHVILLE– Overall truck sales are down and are probably going to stay down well into 2008, according to W. Marvin Rush, chairman of Rush Enterprises, which owns the largest chain of Peterbilt dealerships in the U.S. However, certain niches within the trucking industry such as oilfield services, small fleets and medium-duty operators are poised to produce good returns for the firm.

    “There are a lot of factors involved as to why we won’t see strong new heavy-truck sales until the second or third quarter in ’08,” Rush told FleetOwner at his company’s second annual technician skills rodeo.

    “The first is that many fleets pre-bought trucks heavily in 2006 so they wouldn’t have to buy trucks with the ’07 emission-compliant engines,” he said. “But they also thought they’d have all those trucks in service by the second quarter this year. That didn’t happen because freight is down, so they are keeping them parked.”

    According to data compiled by the American Trucking Assns. (ATA), freight tonnage year-to-date is down 2.2%, with 2007 poised to represent one of the largest annual drops in trucking tonnage since the 5.2% decline in 2000.

    “We anticipate truck freight volume to be lackluster for the next couple of quarters,” said Bob Costello, the ATA’s chief economist. “There is nothing on the horizon that points to an acceleration in trucking freight.”

    Rush witnessed a 43% drop in its heavy truck sales through the third quarter of this year, selling only 1,820 units compared to 3,512 units by the same point in 2006, according to data gleaned from its third quarter earnings report.

    Yet Marvin Rush believes the pre-buy in 2006 coupled with the decline in freight demand this year could improve the outlook for heavy-truck sales down the road. “Many fleets got burned [this year] by holding so many new trucks so long,” he told FleetOwner. “Also, there are all kinds of trucking niches where sales are steadier. That can help us smooth out the big swing in Class 8 volumes.”

    One of those niches is the medium-duty segment, where Rush has been expanding both its sales and service efforts. As a result, the company’s medium-duty sales through the third quarter topped 1,502 units, up from 1,109 units sold over the same period in 2006. This represents a 34% increase in medium Class 4-7 sales vs. an industry decline of 8%, according to the company’s third quarter report.

    Even in the heavy-truck market, there are some bright spots. Corey Lowe, regional manager for Rush’s stores in Oklahoma, said sales to oilfield service companies continue to be a big niche for his group of stores. “It’s very strong – we’re selling a lot of vocational daycab tractors with beefed-up suspensions,” he told FleetOwner.

    Richard Ryan, regional manager for Rush’s Colorado stores added that sales to small over-the-road and vocational fleets remain steady as well. “The small fleet business is very good,” he said. “We’re going to beat our 2006 numbers this year here in Colorado – and 2006 was a record year for us.”

    About the Author

    Sean Kilcarr

    Editor in Chief

    Sean Kilcarr is a former longtime FleetOwner senior editor who wrote for the publication from 2000 to 2018. He served as editor-in-chief from 2017 to 2018.

     

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