Class 8 orders are returning to a pace more in line with seasonal trends as net orders slowed down in May to 23,600 units with a 32% decrease from April. Despite the decrease, Class 8 units were still up 16,800 units y/y, reaching 242% higher than May 2020 and totaling to 420,000 units for the previous 12 months. While Class 8 orders have been on a torrid pace for the past eight months, FTR Intel urges that the May drop-off does not represent a weakening of demand, as freight growth and spot rates continue to hit all-time highs.
“There is tremendous pent-up demand being generated in this market,” Ake added. “Freight is growing at a brisk pace, but the supply chain bottlenecks slow the flow of new trucks coming off the production line. This, in turn, is keeping the spot market overheated.”
Despite build slots for delivery this year continuing to fill up, OEMs are not yet booking for 2022.
“OEMs are uncertain how to price 2022 models,” Don Ake, vice president of commercial vehicles for FTR, commented. “The prices for steel, aluminum, and rubber have spiked after the economic restart. It is possible we will see record order volumes when the OEMs open their 2022 order boards. “Most fleets have ordered all the trucks they need for 2021,” Ake continued. “They are getting frustrated because production is unable to keep up with demand. Carriers need more trucks on the road now, but semiconductor and other component shortages continue to restrict production.”
Classes 5-7
According to ACT Research, Classes 5-7 demand, with orders at 24,800 units, slipped 14% from April, but still outpacing May 2020 by 168%. Complete industry data for May, including final order numbers, will be published by ACT Research in mid-June.
“As we have been tracking for several months, medium- and heavy-duty backlogs for the remainder of 2021 were essentially filled with April’s orders,” Kenny Vieth, ACT’s president and senior analyst, said. “With 2022 order books not yet opened, it is not particularly surprising that orders for both segments fell to levels last seen in August 2020. We reiterate that the order pullback aligns with expectations, driven by the supply of open build slots in 2021, rather than demand for equipment.”
Regarding the heavy-duty market, Vieth commented, “While orders moderated in May, the three- and six-month net order SAARs and a backlog that was out nearly 12 months coming into the month highlight ongoing demand strength. Like Class 8, May’s Classes 5-7 net orders moderated, if to a lesser degree, in a still-supportive vehicle demand environment.”
