In the auction market, J.D. Power states auction volume pulled back in July while pricing was mixed. There was a resurgence of interest in newer trucks, perhaps as a result of lower values.
- Model year 2016: $46,950 average; $11,200 (31.3 percent) higher than June
- Model year 2015: $26,800 average; $50 (0.2 percent) higher than June
- Model year 2014: $24,250 average; $1,350 (5.3 percent) lower than June
- Model year 2013: $17,900 average; $1,100 (5.8 percent) lower than June
- Model year 2012: $15,500 average; $975 (5.9 percent) lower than June
- Model year 2011: $15,000 average; $3,025 (25.3 percent) higher than June
J.D. Power states in the first seven months of the year, 4- to 6-year-old trucks in its benchmark model brought 2.5 percent less money than in the same period of 2018. The number of these trucks sold fell again in July, and 2019 is running substantially behind 2018 in that regard. Additionally, J.D. Power states Monthly depreciation for this cohort is now averaging 2.9 percent, slightly better than last month and in line with expectations.
Mild depreciation also was evident in the retail channel, though still lower than expected given the devaluation in the auction lanes in previous months.
“End users of used trucks are still confident enough about the freight environment to shop for a newer rig,” J.D. Power says.
The average sleeper tractor retailed in July was 71 months old, had 465,080 miles, and brought $54,644. Compared to June, the average sleeper was 2 months older, had 4,138 (0.9 percent) more miles, and brought $2,580 (4.5 percent) less money. Compared to July 2018, this average sleeper was 3 months older, had 5,106 (0.8 percent) fewer miles, and brought $1,185 (2.2 percent) more money.
- Model year 2018: $107,603; $2,302 (2.2 percent) higher than June
- • Model year 2017: $83,960; $529 (0.6 percent) lower than June
- • Model year 2016: $66,583; $2,794 (4.0 percent) lower than June
- • Model year 2015: $52,937; $1,813 (3.3 percent) lower than June
“Year-over-year, late-model trucks sold in the first seven months of 2019 brought 10.8 percent more money than in the same period of 2018,” J.D. Power states. “Depreciation in the first seven months of 2019 averaged 1.3 percent per month, compared to 0.7 percent in the same period of 2018.”
Somewhat surprisingly the company adds sales per dealership also rose substantially last month to 4.8 trucks per rooftop.
J.D. Power notes “some of this increase was due to a new dealer group with heavy medium-duty volume contributing sales for the first time, but the overall environment felt more positive in general.”
Dealers are selling an average of 10.6 percent fewer trucks in 2019 compared to the same period of 2018.
This month’s Commercial Truck Guidelines also notes the impact of ongoing tariff discussions.
“Most recently, productive talks have failed to materialize and there has been little change in purchases of U.S. products. China has allowed its currency to fall to a level not seen since 2008, making that country’s exports more attractive. Global investors are starting to view the tariff war as a race to the bottom, and are looking at alternatives to the dollar, mainly the Euro, for balance. The impacts of a protracted trade war are becoming more tangible. As long as businesses maintain employment levels, consumers will continue to spend, keeping the economy humming along. But negative signs are becoming hard to dismiss.”
In the medium-duty space, Class 6 conventionals had a resurgence in July — bouncing back from the slump of the previous two months. Class 4 conventionals were stable and Cabovers also rebounded a bit from last month.
Starting with Class 3-4 cabovers, J.D. Power says July’s average pricing came in at $16,434. This figure is $2,536 (18.2 percent) higher than June, and $883 (5.7 percent) higher than July 2018. Looking at conventionals, Class 4’s averaged $23,967 in June. This figure is $288 (1.2 percent) higher than June, and $4,631 (24.0 percent) higher than July 2018. Class 6’s averaged $24,971 in July. This figure is $6,396 (34.4 percent) higher than June, and $5,635 (29.1 percent) higher than July 2018, J.D. Power says.
Looking over the entire market, J.D. Power’s forecast expressed some optimism despite some lower prices.
“July’s results are promising because they suggest lower pricing may be keeping buyers in the market. There is certainly a higher level of inventory on dealers’ lots than this time last year, and the freight environment is cooler. But consumers continue to buy goods, which is mitigating the more negative dynamics in the trucking economy,” the company notes.
For more information, and to read the entirety of this month’s report, please CLICK HERE.
