Orders for Class 8 trucks continued to soar in September, while demand for medium-duty trucks remained more muted. However, on the heels of the recent introduction of new models from Volvo Trucks North America (VTNA), Mack Trucks, and Navistar, a major market share war may be shaping up for 2018, noted one industry analyst.
According to data tracked by ACT Research, preliminary North American Class 8 net order volume topped 22,600 units, up 62% in year-over-year comparisons.
FTR Transportation Intelligence posted similar numbers, noting its preliminary North American Class 8 net order volumes for September hit 22,100 units, up 7% in month-over-month comparison with August and up 62% compared to September 2016.
“The recovery in the Class 8 market is building,” noted Don Ake, FTR’s vice president of commercial vehicles, in a statement, adding that North American Class 8 order volume over the past twelve months totals 239,000 units.
“This is a healthy, growing truck market, which is in excellent position for greater expansion in 2018,” Ake said.
He pointed out that Class 8 order rates are expected to jump in the fourth quarter of 2017 and that orders from Canada were particularly robust as fleets benefit from what Ake called a “strong economy,” with a similar trend shaping up in the U.S.
“Stronger freight growth generated by a more vibrant U.S. economy will spur demand for additional trucks next year,” he explained. “Factor in the loss of productivity from ELDs [electronic logging devices] and fleets will have to expand capacity to haul the available freight.”
Meanwhile, Kenny Vieth, ACT’s president and senior analyst, noted that while the medium-duty market is also experiencing increased order rates, they are not matching the trend occurring in the Class 8 segment.
ACT said preliminary North American medium-duty orders in September topped 20,900 units – up 11% from August and up 2.1% year-over-year – but remained below first half of the year activity levels.
Michael Baudendistel, vice president of Stifel Capital Market’s transportation & logistics research group, added that the spike in Class 8 orders is also setting the stage for a market share battle of sorts among OEMs.
“Class 8 market share gains will be hard fought in 2018,” he explained in a recent research brief. “Product life cycles tend to be long in trucks, but essentially every OEM has new or relatively new Class 8 products to display.”
He thinks Navistar is most likely to gain share in 2018, as it has the most to gain following recent declines and has introduced several new products, such as the LT Series and RH Series tractors, plus the new HX Series vocational truck.
Baudendistel added that Navistar is also adding its internally-manufactured 12.4 liter A26 engine to its HX Series line and is developing a new powertrain with Volkswagen, which will be available by 2021. Additionally, Navistar plans to introduce a fully-electric Class 6 truck, developed with VW, by late 2019 and is merging its telematics platform with Volkswagen’s.
“And those [are] just the major updates,” Baudendistel said. “We believe the company is making a compelling case that its turnaround is now fully under way.”