FTR reports preliminary Class 8 orders for June at 13,000 units, up 24 percent from its estimation in May. ACT Research’s preliminary total was slightly higher at 13,100 units, a 20 percent bump over its May total. ACT says June’s total is down 69 percent year over year.
Including June activity, FTR says this is the weakest six-month start to a year since 2010. Most orders for 2019 delivery have already been placed. FTR says fleets are moving around previously placed orders and adjusting delivery times according to business conditions and smaller fleets and dealers are placing small fill-in orders, as production slots become available in the near term.
“The orders are truly a mixed bag. One OEM reportedly started to take orders for 2020, but the other OEMs apparently did not. Without the 2020 orders, the total would have dipped below the 10,000 unit mark,” says Don Ake, FTR vice president, commercial vehicles. “Most OEMs are reluctant to quote future trucks due to uncertainty over material costs. Until the tariff situation is resolved, it is risky to quote prices for 2020. Fleets are also reluctant to accept material surcharges with this much ambiguity present.”
“Weak freight market and rate conditions across North America and a still-large Class 8 backlog continue to bedevil new Class 8 orders,” adds Kenny Vieth, president and senior analyst, ACT Research. “Seasonal adjustment lifts June’s Class 8 net orders to 15,100 units, and through the first half of 2019, Class 8 net orders were booked at a 181,000 seasonally adjusted annual rate.”
FTR says backlogs should fall under 200,000 units for first time since May 2018. Class 8 orders for the past 12 months now total 331,000 units.
“The economy and freight are still growing, but the latest manufacturing data is not promising. The consumer sector is sturdy, but freight growth is expected to moderate the rest of the year. As a result, Class 8 truck build rates should begin to decrease in the coming months,” Ake says.
Within the medium-duty market, Vieth says the order trend remains “off the pace set in the first half of 2018, but continues to benefit from the underlying strength in the consumer economy. In June, North American Classes 5-7 net orders were 19,200 units, down 30 percent year over year and 5.7 percent from May.
He adds, “While we have to go back 23 months to find a weaker medium-duty order month on an actual basis, we only have to go back three months when looking at seasonally adjusted data.”
