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The State of the Dealer Market

Lucas Deal December 20, 2013

Dick Witcher, CEO at Minuteman Trucks at ATD chairman, says the entire trucking industry felt the impact of the issues in Washington. But as problems were solved, the market slowly responded.

One market segment where new vehicle sales grew in 2013 was the medium-duty marketplace.

Kenny Vieth, president and senior analyst at ACT Research Co., says Class 5 trucks experienced their best order month in five years in October, while Class 6-7 sales also posted great results.

Witcher believes new hours of service regulations and urban delivery needs are forcing more and more fleets to integrate medium-duty vehicles into their operations.

He notes the changing needs of fleet customers also are a contributing factor.

“At one time customers would buy trucks for the max load, now I see more and more are buying trucks for diminishing loads and in doing that they are stepping down in vehicle class,” he says.

Althardt says he’s seeing similar buying patterns at his locations. Peach State Freightliner has added a Fuso franchise to handle the demand.

Both dealers see the medium-duty market continuing grow next year.

“If you look at current and prior year sales we’re seeing more volume coming to the medium-duty market and that trend appears to be continuing,” Witcher says.

The Class 8 market also appears poised for a stronger year in 2014.

Used sales may continue to outpace new sales, but Ely says there is pent up demand for new trucks in the marketplace by fleets that held off purchases in 2012 and 2013. And with early reviews of the 2014 engines coming back positive, Ely says some fleets may look at new tractors as replacements.

“Demand could be up for a year or two, the question for dealers will be can they capture more than their fair share of it?” he says.

Althardt says the higher costs that slowed new truck sales in 2013 will remain an issue with small- and medium-sized fleets, but he believes most national carriers will begin to purchase new vehicles when making replacement decisions in 2014.

For fleets turning trucks over every two to three years, up-front expense isn’t a new phenomenon, he says.

But confidence in large fleet purchases isn’t enough for the industry to project a booming 2014. The dealer market still faces sales challenges.

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