April truck orders drop 18.3%
May 23, 2012
April net orders for U.S. and Canadian class 8 trucks dropped to 13,200 units. This is a decline of 18.3% versus last month and year over year growth was also negative, down 59.7%. The 13,200 units that were ordered represent the lowest level since September 2010 – which was just prior to the runup in order activity that culminated in the April 2011 figure of nearly 33,000 units ordered. Year-over-year growth moved noticeably more negative. The year-over-year comparison will ease next month as we have finally overlapped the surge of activity in April 2011.
Over the last 4 months the industry has seen a steady decline in order activity. This is somewhat seasonal as we come off of the traditional order season from October to February. The summer is always the weakest order period of the year. As such, expect softer orders over the next several months.
The slowdown in orders suggests that there is plenty of truck capacity in the market. Also, this confirms that truckers are less willing to put additional capacity into service this upturn.
The slowdown is also putting a burden on truck manufacturers who thought that demand would remain at elevated levels. As such, they are overbuilding for current demand levels. What this means is that a larger than normal amount of inventory is being put on the truck dealer lots. You can easily get a truck whenever you want. Also, keep an eye out for incentives to move this inventory later in the year.
- Source: FTR Associates’ OEM Market Indicator Database
- The graphed data is for U.S. and Canadian truck orders only
- The market indicator data includes all major North American truck builders.
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