Used truck pricing better than expected
The average selling price of total reported Class 8 used trucks continued to hold up higher than expected in August, according to the latest release of the State of the Industry: U.S. Classes 3-8 Used Trucks, published by ACT Research.
“For the first seven months of this year, prices were down only 4 percent relative to the same period in 2012,” says Steve Tam, Vice President-Commercial Vehicle Sector with ACT. “As retail sales of new trucks have improved, younger trucks with fewer miles are making their way into the used truck arena. Because these trucks have more usable economic life, they are also bringing higher prices,” he added.
The report from ACT provides data on the average used price for the top-selling Class 8 model for each of the major truck OEM’s – Freightliner (Daimler); Kenworth and Peterbilt (Paccar); International (Navistar); and Volvo and Mack (Volvo).
With only replacement demand in sight, challenges are on the horizon for truck manufacturers.
North American Class 8 production likely won’t exceed the 2012 level of 273,000 units until 2015, and even then FTR is forecasting only 275,000 trucks, FTR President Eric Starks said Wednesday at the 2013 FTR Transportation Conference in Indianapolis, Ind.
Truck manufacturers don’t have much backlog; after the fourth quarter of this year their order books for production are quite low. One potential bright spot for truck and trailer manufacturers is that regulatory changes — especially the recent changes to the hours-of-service rules — will negatively impact productivity and will increase demand for equipment as well as drivers.
While the next couple of years will be challenging, the three to five years thereafter promise to be very strong for carriers and equipment suppliers alike, argued Eli Lustgarten, senior vice president of Longbow Securities.
Some of the major factors behind Lustgarten’s optimism is the growth in the domestic energy production to the point where United States could become a net energy exporter and the shortening of manufacturing supply chains. “The reshoring/nearshoring phenomenon is real, enhancing a renaissance of American manufacturing,” Lustgarten said.
Avery Vise contributed to this report.