Commercial vehicle inventory levels reach a 41-month low

June 23, 2009
In preparation for a June 18, 2009, full House Homeland Security Committee mark-up of HR 2868, the Chemical Facility Anti-Terrorism Act, the National Association of Chemical Distributors (NACD) sent a letter to the committee members outlining several concerns about the bill

Class 5-7 retail sales were off 54 percent from May 2008, but continued low production output has reduced inventory levels to a 41-month low.

owever, the inventory-to-sales ratio (IN/RS) in the medium-duty market is now at seven months, more than double normal levels. The trend is similar in the Class 8 market, where retail sales fell 52 percent from May 2008, but the IN/RS ratio is only 3.4 months.

“Although the low inventory is a positive,” said Steve Tam, ACT vice-president–Commercial Vehicle Sector, “at current depressed sales levels, the Classes 5-7 market will have to improve significantly to justify ramping up production.”

According to ACT’s recently released State of the Industry: Classes 5-8 Vehicles report, Class 8 net orders were soft in all three North American markets, but most pronounced in Mexico. When Mexico is combined with other export markets, net orders were off 89 percent from May 2008.

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