Volume swings down as used market slips in May

Class 8 auction sales tumbled precipitously in May, with volumes and pricing notably lower than April, J.D. Power reports in its Commercial Truck Guidelines Industry Report for June 2017.

In the wholesale auction market, J.D. Power’s benchmark model shows sleeper tractor prices fell by an average of 10.1 percent, a major slip from the flat pricing seen during the first quarter. MY 2011 tractors were down 11.6 percent; MY 2012 was down 5.2 percent; MY 2013 slipped by more than 13 percent.

“A late spring/summer lull in sales volume is not unusual, and given the lack of change in any trucking-focused economic measures, we do not consider May’s results indicative of a market shift,” J.D. Power reports. “We continue to view the auction market as firming up as pricing finds its low point.”

This assessment corresponds with overall data for April, where J.D. Power says the average sleeper tractor sold wholesale was 70 months old, had 533,033 miles, and brought $28,542. Those age and mile numbers were nearly identical to the previous month, but price was down 2.6 percent ($772).

“The two main factors behind the decline were a large group of low-priced identically-equipped 2014 model-year trucks and a very low volume of model-year 2015 trucks. Both factors are isolated situations and not indicators of market movement, so we do not assign particular importance to the lower monthly average,” J.D. Power says.

On the retail side, this month’s report also has sales data through April. The average sleeper tractor retailed in April was 74 months old, had 452,481 miles and sold for $48,460. Compared to March, that tractor was three months older, had 2.6 percent more miles and brought 1.3 percent less money.

Compared to 2016, J.D. Power says prices for the first four months of the year are down 9.4 percent year-over-year, but with monthly depreciation rates up to 1.9 percent (compared to 3.5 percent in 2016) overall late-model trucks are selling for just 6.7 percent less than than 2016.

Looking ahead, J.D. Power believes a drop in sales volume to be a larger risk than shifting prices.

“Incoming May data points to a notable volume decline. Monthly results through April had been relatively strong, with that month returning to a 5.2 truck average, which is 0.7 truck ahead of the same period in 2016. May’s results could show a drop into the low- to mid-4 range, which would be unusually low.

“Summer is not typically a strong period for sales volume, but a drop of this magnitude would warrant further investigation.”

The medium-duty market saw an increase in higher-mileage cabover trucks sold in April, and J.D. Power reports the market’s strength continues to be concentrated on the newest trucks. Additionally, conventional medium-duty data shows “lighter-GVW trucks continue to outperform their heavier counterparts,” J.D. Power says.

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