Rising sales volumes in the used truck space didn't stop pricing from continuing to rise, J.D. Power reported Tuesday in its March 2022 Commercial Truck Guidelines industry report.
Pricing changes were minimal in the auction space, where auctions and volumes returned after a very slow January. Model year 2020 trucks saw a huge spike in sales, and many 2019 trucks sold had incredibly high mileage. Within the popular sector of 2- to 6-year-old trucks, average pricing was as follows:
- Model year (MY) 2021: No trucks sold in February
- MY 2020: $155,696; $8,087 (4.9 percent) lower than December
- MY2019: $113,306; $18,432 (13.9 percent) lower than December
- MY 2018: $104,014; $8,162 (8.5 percent) higher than December
- MY 2017: $85,345; $12,040 (16.4 percent) higher than December
J.D. Power says it compared February to December due to the lack of volume in January. It also notes it will refer to MY 2018 to 2020 and 3- to 5-year-old trucks moving forward. The company also notes the auction space will likely be the first sector of the used truck market to show weakness if global events begin to create an economic downturn. "World events are substantially increasing downside risk to the economic recovery and further growth."
Pricing was stronger in the retail space where demand continues to drive pricing to all-time highs.
J.D. Power says the average sleeper tractor retailed in February was 69 months old, had 452,369 miles and brought $110,686—the second consecutive month over $100,000. Compared with January, this average sleeper was one month older, had 416 (0.1 percent) more miles, and brought $10,590 (10.6 percent) more money. Compared with February 2021, this average sleeper was two months newer, had 0.7 percent more miles, and brought $52,020 (103.5 percent) more money.
For 2- to 6-year-old trucks, pricing was as follows:
- MY 2021: $175,083; $441 (0.3 percent) higher than January
- MY 2020: $154,389; $11,454 (8.0 percent) higher than January
- MY2019: $133,035; $9,535 (7.7 percent) higher than January
- MY 2018: $110,617; $1,546 (1.4 percent) higher than January
- MY 2017: $75,377; $549 (0.7 percent) higher than January
Sales per rooftop also rose in February to 3.8 trucks from 3.4 in January. J.D. Power again mentions the Russia-Ukraine conflict as a potential factor that could slow the market moving forward. The company says its February data was compiled before the onset of the conflict.
"The war substantially increases the risk of an economic pullback. The shortage of new and used trucks is so acute that pricing would probably not change notably if the freight market cools somewhat. Prior to the invasion, we expected pricing to plateau and then pull back incrementally as 2022 progresses. We’re sticking with that assessment for now," the company says.
Medium-duty prices also leapt forward last month, J.D. Power states. Class 3-4 cabovers averaged $32,961 in February. This figure was $2,056 (6.7 percent) higher than January, and $13,922 (73.1 percent) higher than February 2021. Class 4 conventionals averaged $38,334 in February, $712 (1.8 percent) lower than January and $15,598 (68.6 percent) higher than January 2021. Class 6 conventional pricing averaged $51,681 in February, $2,012 (4.1 percent) higher than January and $28,629 (124.2 percent) higher than February 2021.
In predicting the month's ahead, J.D. Power says Russia's invasion will likely impact the market in some capacity but how significantly remains to be seen.
"Just as the global supply chain was starting to show the first signs of repair, Russia's invasion of Ukraine set things back substantially. Focusing on the economic impact of the war, both countries are sources of energy and raw materials, including those used to manufacture semiconductors," the company states.. "At this point in mid-March, repercussions are already showing up in the form of spiking crude oil prices and accelerated inflation. Material shortages will worsen incrementally going forward — the last thing the truck making industry needs.
To predict the war’s effect on trucking, we need to view the current truck shortage in the context of the extremely hot freight market. In 2021, OEMs delivered roughly 18,000 trucks per month. This figure would be only slightly low in a typical economy, but is severely inadequate in the current environment. The first two months of 2022 saw a drop to about 15,000 trucks per month, further exacerbating the shortage."
If nothing changes in the freight market, J.D. Power believes the parts and materials shortage will keep truck supply well below demand for most of 2022. However, interest rate increases, the company says inflation and the end of individual stimulus were factors "already set to potentially place downward pressure on freight. This risk just increased even more thanks to Russia’s invasion of Ukraine."
For more information, and to read the entirety of this month’s report, please CLICK HERE.