Factors fuel rebound in Class 8 demand

Nov. 17, 2010
Several factors are combining to fuel a rebound in demand for heavy-duty (Class 8) commercial vehicles, according to ACT Research Co:

Several factors are combining to fuel a rebound in demand for heavy-duty (Class 8) commercial vehicles, according to ACT Research Co:

•Third quarter earnings indicate trucking company profitability continues to improve even as economic growth moderates.

•The value of used trucks has firmed in recent months.

•The average age of carrier fleets is as old as ever.

•This combination of factors suggests a growing number of freight hauling fleets will have both the need and the ability to reinvest in equipment.

In the latest release of the ACT North American Commercial Vehicle Outlook, ACT projects full-year 2010 production of Class 8 vehicles approximately 151,000 units, up 27% from a weak 2009, but still well below normal replacement demand. ACT forecasts that demand will continue to ramp up for the next two years, with production in 2012 exceeding 300,000 units. The forecast for medium-duty (Classes 5-7) production is more muted, growing 15% in 2010 and 14% in 2011 due to the slow recovery in the construction and housing sectors.

“Our forecast for 2010 has stayed in a narrow range for the past 15 months as our model predicted a slow economic recovery and heavy-duty demand still well below normal replacement,” said Kenny Vieth, president and senior analyst with ACT. “While headwinds make a full-blown economic recovery unlikely before 2012, recent trends in the transportation and commercial vehicle markets point toward demand for new vehicles building throughout 2011 and 2012.”

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