North American Class 8 truck orders hit 15,200 units in March, according to FTR – the third consecutive month with order activity below 20,000 trucks.
March 2019 was the lowest March order total since 2010, was 8 percent below February and down 67 year-over-year.
ACT Research Vice President Steve Tam says March marks the fourth consecutive month with orders falling meaningfully below the current rate of build.
“Over that four-month period, Class 8 orders have been booked at a 194,000 SAAR, (seasonally adjusted annual rate) compared to a 489k SAAR for the same period a year ago,”
“These are extraordinary market conditions. Most fleets ordered well in advance of their need for trucks in 2019,” adds Don Ake, FTR vice president of commercial vehicles. “OEM production slots were scarce in 2018 and supplier constraints caused disruptions in supply, so fleets didn’t want to get shutout this year. Now so many build slots have been reserved, fleets that are currently placing orders for delivery this year don’t have many options.”
Class 8 orders for the past 12 months have now totaled 397,000 units.
Truck demand is still strong, but with all choice build slots filled for this year, Ake says fleets that need trucks are basically taking whatever is available. Backlogs are also rapidly declining as the market tries to rebalance and establish some semblance of normality.
“Even though the economy and freight growth appear to be slowing, it has not impacted OEM line rates as of yet,” Ake says. “Fleets are still putting more trucks in service and competing in a still decent freight market. It is expected that Class 8 sales will moderate sometime before the end of the year, as industry capacity begins to catch up with the freight surge that began in 2018.”
Even though demand is a shadow of its 2018 self, Tam says slowing order intake masks current conditions.
“Admittedly, economic and freight growth are slowing, but both are still growing,” he says. “And in the context of retreat from record levels, it is no wonder truck buyers continue to pursue incremental profits, as evidenced by the number of unbuilt units in the backlog.”