Weekly TPS reader survey shows business conditions remain poor but could be stabilizing

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Updated Apr 18, 2020
04.20.TPS coronavirus chart week 3

The COVID-19 coronavirus pandemic has turned business from bad to worse in the dealer and aftermarket channels, but conditions are not substantially worse when viewing week-over-week data from the third Trucks, Parts, Service reader survey on business conditions that was completed Wednesday.

Aftermarket sales continued their steady downswing for the third consecutive week, with 75 percent of responders now categorizing their parts and service revenues as “decreased” or “decreased significantly,” a five percent uptick from last week and nearly 20 percent higher (58 percent) than the first week in our survey. Aftermarket negatively wasn’t limited to any single operating group either as independents, dealers and their supplier partners are all beginning to feel the crunch of COVID-19 on their sales. Independent parts and service responders said revenues were down 75 percent this week, dealer and supplier responders said sales fell 76 percent.

“Business has really slowed. Many customers are showing huge decreases [in purchasing],” said one responder. Another noted their business “is decreasing more as each week progresses. We are about 30 to 35 percent below our normal after last week.”

Separating sales by segment shows the parts business appears to be taking the coronavirus shutdown a little more directly on the chin — 94 percent of responders indicate their parts-only sales have slowed from pre-virus levels — but neither segment brings much optimism when looking at the immediate future. More than three quarters of TPS survey responders said they expect their parts sales to continue falling over the next month. When coupled with service, that total shifts to just 56 percent of responders anticipating further sales reductions, though another 34 expect sales to maintain at their current already well below seasonal averages into May.

“We are seeing somewhat normal ordering patterns but less product ordered per purchase order,” said one responder.

The downswing is starting to impact industry employment as well; 38 percent of survey responders said they have reduced their workforce since the beginning of the pandemic. That’s a 4 percent rise over last week and 12 percent higher than our initial survey two weeks ago. And other responders who have not cut staff yet note they have “cut hours back on most personnel.”

And, as other news in the industry has made clear over the last two days, equipment sales aren’t handling this pandemic any better. Truck and trailer dealers continue to see sales totals crater as fleet demand for replacement vehicles fall and long-term plans are updated. This week 67 percent of new truck dealers and 64 percent of used truck dealers admitted their sales totals have fallen since coronavirus upended the economy. That new truck total is similar (64, 66 percent) to what TPS responders said in weeks 1 and 2, while the used truck number is a substantial uptick from just 51 percent of responders last week.

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Trailer sales are worse. Every responder to this week’s TPS survey who sells new trailers said their business has decreased since the outset of the pandemic. Used trailer sales weren’t quite as bad, 6 percent of responders have seen business rise and 13 percent said their business is steady, but half of dealer survey responders still admitted business was down.

Looking into the future is a precarious position with the economy in flux every day, but according to the dealers responding to this week’s survey, many are confident in saying the current equipment trough is unlikely to lead to a sales recovery any time soon. Among new and used truck dealers, just 6 percent (new) and 11 percent (used) are anticipating an uptick in sales by mid-May. Trailer dealers feel the same, with no new dealers expecting a sales boost and only 6 percent of used dealers hoping for good news.

But responders also note it is hard to predict the future without having more information about the virus and mitigation strategies that would enable the economy to slowly reopen.

Noted one truck dealer, “For both new and used trucks we need to see if this ‘plateau’ has actually been reached in the overall pandemic. The next seven to 10 days will provide better insight to that.”

Without that information on hand, responders to this week’s survey essentially viewed the last seven days as equal to the seven before. On our question ranking this week on a scale of 1 to 10 (with 1 being the worst week ever and 10 being the best), TPS survey responders pegged the last week at a 4.52, a slight change from last week’s 4.43 score.

When asked about the week ahead, responders were more bullish, scoring a 4.38 on average. Last week responders pegged the week ahead a pessimistic 3.96. Yet despite the higher score, only 1 percent responders predicted the week ahead to score higher than an 8 on our sliding scale and 6 percent guessed next week will be the worst yet.

That uncertainty was visible in reader comments.

“There’s no real way to know. We’re taking it week by week,” said one responder. Another added bad weeks just keep on coming, with a third chiming in that business “looks to be slowing but expect another three to four weeks to get through this.”

“I think business would increase if we could get a definite date of when the Federal government will lift restrictions,” said another responder. “The issue will be that each state and local government can still issue different stay at home orders.”

To participate in next week’s Trucks, Parts, Service survey regarding business conditions in the aftermarket and dealer channels due to the COVID-19 coronavirus pandemic, please CLICK HERE.

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