Class 8 truck orders slow in May

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Class 8 truck orders slumped from April to May but, as you might imagine, orders are up significantly from May of last year.

FTR reports May orders of 23,600 units. Class 8 orders are returning to a pace more in line with seasonal trends. May orders were down 32 percent month over month but still up 16,800 units year over year from the weak level in 2020. Class 8 orders now total 420,000 units for the previous 12 months.

ACT Research reports Class 8 net orders in May were 22,900 units, down 32 percent from April, but a significant 242 percent higher than May of 2020’s COVID-stricken intake.

Class 8 orders have been on a “torrid” pace for eight months, and the drop-off in May does not represent a weakening of demand, as freight growth continues to be robust and spot rates are hitting all-time highs, FTR reports. Build slots for delivery this year are filling up and OEMs are not yet booking for 2022.

“Most fleets have ordered all the trucks they need for 2021. They are getting frustrated because production is unable to keep up with demand. Carriers need more trucks on the road now, but semiconductor and other component shortages continue to restrict production,” says Don Ake, FTR vice president of commercial vehicles.

“There is tremendous pent-up demand being generated in this market. Freight is growing at a brisk pace, but the supply chain bottlenecks slow the flow of new trucks coming off the production line. This, in turn, is keeping the spot market overheated,” Ake says.

“OEMs are uncertain how to price 2022 models. The prices for steel, aluminum, and rubber have spiked after the economic restart. It is possible we will see record order volumes when the OEMs open their 2022 order boards,” he says.

“As we have been tracking for several months, medium- and heavy-duty backlogs for the remainder of 2021 were essentially filled with April’s orders,” says ACT President and Senior Analyst Kenny Vieth. “With 2022 order books not yet opened, it is not particularly surprising that orders for both segments fell to levels last seen in August 2020. We reiterate that the order pullback aligns with expectations, driven by the supply of open build slots in 2021, rather than demand for equipment.”

Regarding the heavy-duty market, Vieth says while orders moderated in May, the three- and six-month net order SAARs and a backlog that was out nearly 12 months coming into the month highlight ongoing demand strength. “Like Class 8, May’s Classes 5-7 net orders moderated, if to a lesser degree, in a still-supportive vehicle demand environment,” he says.

Class 5-7 demand, with orders at 24,800 units, slipped 14 percent from April. Demand in this segment also enjoyed an easy year-ago comparison, outpacing May 2020 by 168 percent, ACT reports.        

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