• OEMs project banner 2005

    OEMs project banner 2005
    March 31, 2005
    3 min read
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    LOUISVILLE, KY. OEMs seem to have reached a consensus that a robust economy, coupled with pent-up replacement demand, will make 2005 a banner year for truck sales.

    Peterbilt, a division of Paccar, Inc., is predicting that 2005 is going to be another record year for Class 8 and medium-duty truck sales in North America. In 2004, total sales of Class 8 vehicles in the U.S. and Canada exceeded 233,000 units -- an increase of 42% over 2003. This year Peterbilt is forecasting Class 8 sales of between 270,000 and 280,000 units — an increase of about 18% Medium-duty sales are expected to total between 90,000 and 100,000 units.

    Freightliner, a company of DaimlerChrysler, expects sales in the Class 8 market to increase 19% over 2004 to 280,000 units, with Class 6-7 sales climbing 18% to 190,000 units.

    Volvo Trucks North America, a subsidiary of AB Volvo, believes truck sales should continue to grow about 15% to 20% over 2004 across all segments of the industry, including truckload and LTL carriers, construction fleets, leasing and rental fleets, and owner-operators.

    Driver shortages continue to be a wet cloth on an otherwise hot OEM market, however, as are stratospheric fuel prices, and some doubts about capacity utilization because of uncertainty over whether the “new” hours-of-service rules will stand.

    Although Peterbilt cited fleet expansion as factor in 2005 truck sales, Volvo disagrees.

    “We’re seeing replacement demand; not growth,” said Scott Kress, senior vp-sales & marketing for Volvo Trucks North America. “Having said that, though, freight is still strong, financing is widely available, and fuel surcharges are helping manager higher diesel prices. We think 2005 is going to be a very good year for the industry.”

    Fuel prices, in particular, were cited as a problem that’s here to stay.

    "The upward trend in fuel prices is forecasted to remain for the rest of 2005," said Dan Sobic, Peterbilt's general manager & vp. "Though many fleets are recouping that higher fuel expense through fuel surcharges, and shippers are willing to pay those surcharges to get capacity, it's proving much more difficult for the owner-operator."

    “Diesel fuel prices remain a concern,” said Rainer Schmueckle, president & CEO of Freightliner. “Prices have risen to an average of $2.25 per gallon in the U.S. and the forecasts I made that we will see $3 a gallon for diesel within 5 years I am sticking with.”

    Schmueckle added that aerodynamics and fuel efficiency would become a major sticking point among truck buyers.

    High fuel prices puts cost pressures on OEMs, as well as fleets. However, despite the strains of higher raw material costs – especially steel – and component shortages last year, Schmueckle believes the worst is over.

    “Raw material supply and cost issues should ease in the second half of 2005 and component shortages should ease after the first quarter,” he said. “We’ve think we’ve seen the worst, although the high cost of oil and oil-related products adds some uncertainty.”

    Freightliner’s Schmueckle also added a word of reassurance to fleet executives concerned about extra costs associated with 2007 emissions-compliant engines.

    “I consider the outlook for 2007 to be better than everyone thinks,” he said. “No doubt the engines and technology will be more expensive, but we do not expect customer operations costs to go up more than 2%. I’ve heard the ‘doom and gloom’ forecasts for 2007 and its impact on the industry but I do not think those dismal predictions will come true.”

    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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