Truck orders fall in June
July 23, 2012
After a small uptick in May, orders for U.S. and Canadian class 8 trucks returned to its slowdown in June, dropping for the fifth time in the last six months. Net orders fell 11.2% from the prior month and the year-over-year declines continued, down 25.6%. June orders of 12,700 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 declines have been modestly negative except for a one month drop of over 50% in April when we have overlapped the 2011 surge in orders.
Orders remained below the 15,000 level for the third straight month. These are weak volumes and signify that the industry is not intent on adding capacity and is once again focusing merely on replacement of units. The weakness in freight that we had during 2011 is finally affecting the equipment market and it is unlikely to turn around quickly. The summer is always the weakest order period of the year, but that doesn’t fully explain the weak order levels. We expect softer orders over the next several months.
The slowdown in orders has only now started to impact truck manufacturers – and they continue to build too many vehicles relative to demand. Hence, new truck inventories remain elevated. What this means is that a larger than normal amount of inventory is being put on the truck dealer lots. They have curbed their production plans for the third quarter but additional cutbacks are likely in late 2012 or early 2013.
- 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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