New truck lead time falls in May
June 21, 2012
With truck manufacturers currently overbuilding relative to actual truck sales, the lead time for getting an ordered class 8 truck fell below 4.0 for the first time since October 2010. For trucks ordered in May, the calculated average time from order to delivery fell to 3.6 months. This is nearly a full month drop from April when it stood at 4.4 months. This metric has been under a reading of 5.0 for the last 4 months. A reading under 5.0 suggests that there is ample production capacity online to meet demand. As levels approach 4.0 (and we are now under that!) it would suggest that there is excess production capacity online and manufacturers should be looking to cut production.
Still no need to rush
Q2 build slots will be filled shortly but there is still plenty of open production capacity for the second half of the year – and there could be a lot more if OEMs don’t start reducing their production plans. Truckers can easily get a truck in the near-term – both from new truck orders or directly from dealer inventory. Inventory levels have moved noticeably higher over the last few months and pricing pressure is starting to build for dealers to start getting it moving out the door.
- Source: FTR Associates’ OEM Market Indicator Database
- The graphed data is for total N.A. backlogs/build ratio. This includes U.S., Canada, Mexico, and Export data
- The market indicator data includes all major North American truck builders.
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