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  • Heavy Truck Orders Plunge 37 Percent in December

Heavy Truck Orders Plunge 37 Percent in December

Dealers Sitting on Large Inventories, Offering Incentives

Jan 7, 2016
The automotive industry may have had a record 2015, but things aren’t quite as rosy on the commercial truck side. According to a Wall Street Journal report, heavy-truck sales were down 37 percent in December. As with franchise auto dealers, heavy-truck dealers place orders in advance, and truck “sales” are sales to the dealership, not retail deliveries. A few months ago, expectations were for a strong economy going forward and a busy holiday season. When that didn’t come to fruition, Class-8 truck dealers were suddenly stuck with high inventories of unsold trucks.
According to the report, dealers are offering incentives such as thousands in service and maintenance credits, deferred first payments, and other spiffs not offered in years. Due to the hefty six-figure purchase price for new Class-8 trucks, smaller trucking fleets have been the most hesitant to make new purchases on an uncertain outlook going into 2016. An additional headwind for new heavy-truck sales is low diesel prices, suddenly making less-efficient, but lower-cost, used models more attractive.
The reduced demand for Class-8 trucks has resulted in staff reductions at several companies, including Daimler AG’s U.S. operations (Freightliner), Navistar, and diesel engine-maker Cummins. Most Class-8 manufacturers and dealers expect an eventual recovery and say that it may take several months to bring production back up, temporarily causing a shortage of new-truck inventory, once the current inventory surplus is sold off. One thing’s for sure: If you’re looking at buying a new Class-8 truck as a fleet or an independent operator, it’s a buyer’s market.
Source: Wall Street Journal

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