Work Truck Solutions has released its 2023 Annual Commercial Vehicle Market Analysis.
Work Truck Solutions says the commercial vehicle market has seen remarkable changes over the recent years, but for informed stakeholders, most post-pandemic trends have not been completely unforeseen. Work Truck Solutions' reports for 2021 and 2022 offered data-driven insights into how the sector was overcoming labor shortages, manufacturing shutdowns, and inventory challenges. In addition, data concerning price changes, inventory levels, days-to-turn, and mileage were analyzed and confirmed a slow-but-steady recovery.
Amid the dramatic shifts in inventory numbers, Work Truck Solutions says one element of the commentary has remained consistent; business owners continue to need and purchase commercial vehicles no matter the circumstances around them.
Work Truck Solutions' new commercial vehicle data for 2023 trends include:
- Average new vehicle prices increased 1.0% quarter over quarter for 4Q, and 6.5% year over year.
- On-lot per dealer work truck inventory continued to grow, up 20.0% quarter over quarter and a whopping 87.4% year over year, with medium-duty vehicles making up over half of the on-lot mix.
- Average Days to Turn (DTT) is likely being influenced by the increase in available inventory and showed a slight increase quarter over quarter (9.2%) and a significant increase year over year (52.2%). Last year, limited inventory was often sold before hitting the lot.
- Movement of new vehicles increased to the highest value for the year, up 7.8% quarter over quarter and 17.0% year over year.
Work Truck Solutions also notes that although new inventory levels outpaced movement growth, which likely caused the increase in DTT, work trucks and vans carried higher price tags than last year, and the total sales of new commercial vehicles increased significantly.
The company says some used commercial vehicle data trends for 2023 included:
- Median mileage of used work trucks and vans increased 5.9% QoQ and 10.1% YoY.
- Average used vehicle prices decreased 2.1% QoQ and 1.8% YoY.
- Onlot Inventory has been in a decline and fell 6.2% QoQ and 12.1% YoY.
- Average DTT showed a slight increase QoQ of 6.0% and 6.8% YoY.
- Movement numbers fell at an accelerated rate in 4Q, with average moved used work trucks/vans per dealer decreasing 8.7% QoQ and 10.8% YoY.
The company also notes the future of the commercial vehicle market is in the very early stages of alt-fuel transformation, in large part being driven by net-zero regulations and mandates.
"As the availability of regulation compliant vehicles manifests at dealerships, more data will be available to assess the impact on the commercial vehicle market,” says Aaron Johnson, CEO of Work Truck Solutions. "This data will provide insights into the adoption rates of alternative fuel vehicles (AFVs) and how they are being used by fleets, and we anticipate reporting on this specific vehicle segment in coming days as the data becomes more significant across the commercial vehicle market."
Work Truck Solutions adds its data clearly shows the results of used commercial vehicles filling the void of a two-year manufacturing disruption. The available used vehicles today have increased mileage, and with new vehicle inventory levels increasing, the used vehicle segment is taking a hit in all areas.
The trade-off being that there are more new vehicles available for purchase. The company says it can see the year over year cannibalization of the market as the Q4 2022 new vs. used work truck movement ratio was 3:2 (3 new vehicles sold for every 2 used vehicles), compared to the Q4 2023 being 2:1 (2 new vehicles moved for every used vehicle).
When speaking of 2024, Johnson states, “The work truck market for new vehicles is trending positively for dealers, with higher prices and expanded inventory levels. Conversely, the used truck segment is showing some signs of challenges with decreased prices and less inventory. However, regardless of the focus, be it new, used or a mix of both, it is important for dealers to have solutions that help their customers address work truck, van and SUV needs for their businesses. With so much continued opportunity on the horizon for commercial vehicle dealers, it will be the solutions they offer their customers that set them apart.”