Medium-Duty Sales Expected to Stabilize Commercial Market in 2017 News

Medium-Duty Sales Expected to Stabilize Commercial Market in 2017

02.22.2017 - 12:03 PM Comments: 0

After a troublesome period, the commercial truck market may be in the initial stages of a turnaround.

While analysts are forecasting a second consecutive down year for heavy-truck sales and a stable year of growth in the medium-duty market, truck manufacturers are reporting strong growth in their order backlogs during the first quarter of the year.

Production is starting to ramp up to support rising orders for Class 8 trucks. In March, orders rose 41 percent to 22,800 vehicles, signaling a recovery on the horizon.

For example, Volvo Group, which sells Mack- and Volvo-badged trucks in North America, said that deliveries plunged 34 percent to 7,065 vehicles in the first quarter compared with the same period a year earlier. However, orders surged 27 percent to 11,334 in the first three months of the year.

Paccar Inc., the maker of Peterbilt and Kenworth brands, said Tuesday that first-quarter deliveries of its trucks in the U.S. and Canada dipped 8.1 percent to 17,000 compared with the same period last year.

But the company thinks the rest of the year will improve.

“We had good broad-based order intakes across all segments,” said Ron Armstrong, chief executive of Paccar. Demand for vocational has been steady for several years, and orders for long-haul are “good.”

Daimler, which sells Freightliner and Western Star trucks, also acknowledged the difficult heavy-duty truck market in North America when it reported on its finances earlier this week.

The automaker said it expects deliveries of trucks in Class 6 through 8 weight segments to fall about 5 percent this year in North America, with the bigger trucks experiencing a larger sales decrease.

Nonetheless, it is assumed that the market will gradually stabilize as the year progresses.

ACT Research data indicate continued healthy and steady growth in Classes 5 through 7 because of robust economic activity in the service fields.

Medium-duty truck production slowed a bit in 2016 but has still has experienced a “continuous growth cycle” since the end of the economic decline that started in 2007.

Truck makers built nearly 25,000 Class 6 and 7 trucks in the first quarter of 2017, which is flat compared with the same period a year earlier. At 24,183 units, sales were flat.

The medium-duty truck segment is holding steady because the vehicles aren't as dependent on freight and are used more for services like electrical work, plumbing, construction, and telecom.

The medium-duty market is more stable and will continue to have “slow, modest, incremental growth.

Isuzu Commercial Truck of America anticipated a slowdown in the first quarter after a strong 2016, said Brian Tabel, marketing director for Isuzu. But demand has continued to remain strong with “across the board” growth.

Isuzu has seen growing demand in rental and lease and in everything from landscape and construction trucks to refrigerated units.

In mid-April, the manufacturer began taking orders for its new Class 6 F-truck series that will have a segment-first four-cylinder diesel engine and meet the growing demand for highly maneuverable medium-duty trucks in major congested urban areas like New York and Chicago.

“2016 was a record year for the medium trucking industry, and we're seeing the same steady growth even now.”

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