Class 8 truck orders set monthly record in September
Months of accepting only a trickle of heavy-duty orders turned into a torrent in September as Class 8 truck manufacturers fully opened orderbooks, resulting in a preliminary net order record of 53,700 units, ACT Research reported.
“September Class 8 orders were sensational no matter how you slice the data,” said Eric Crawford, ACT Research senior analyst. The industry booked 249,000 Class 8 orders over the last 12 months.
September historically is when manufacturers begin filling build slots for the next calendar year. The biggest order numbers typically come in October and November. But nothing has been typical in manufacturing since the start of the pandemic in early 2020.
Full production shutdowns for nearly two months in 2020 gave way to a recovery spike. Global shortages of semiconductors followed, leaving near-finished trucks awaiting microchips critical to operating the truck.
Avoiding past mistakes in Class 8 truck orders
OEMs miscalculated their ability to produce trucks in the second half of 2021, leading to tens of thousands of canceled orders, many of which pushed into this year; 2022 model year trucks became 2023 model year trucks with a few strokes on a keyboard.
It was an embarrassment OEMs avoided this year by matching orders to production: Essentially one truck completed made room for one new order.
So-called red-tagging on unfinished trucks persists, albeit in smaller numbers than during the peak of the pandemic, according to Mangus Koeck, Volvo Truck North America vice president of strategy, marketing and brand management.
Other key components and volatile commodity prices still vex purchasing and logistics departments. Those issues are easing, replaced by a shortage of workers to build trucks, Koeck said.
Sold out for 2023
“In my 40 years I’ve never seen such a change [like] in the last two years,” said Steve Bassett, president of General Truck Sales, which operates three Volvo dealerships in Indiana and Ohio. “Pre-COVID, we would sell maybe 80% of our trucks out of stock. We literally sold out for all of next year. Every one of those trucks we ordered for 2023 production had a name on it.”
Bassett said his Muncie, Indiana-based General Truck Sales expects to receive 400 build slots for the 1,200 orders he placed.
Pent-up demand and pull-ahead Class 8 truck orders
Between COVID and a super-heated freight market that is continuing to cool, OEMs estimate 80,000 to 100,000 units of pent-up demand beyond replacement purchases for aging equipment.
Those units plus an expected pull ahead of orders in advance of stricter emission regulations taking effect in 2024 could help the industry smooth over the typical roller-coaster cycle into the second half of the decade. But fleets will not get every truck they want when they want it. Older equipment means higher maintenance costs.
“With allocation, you know what you’ve got,” said William “Rusty” Rush, chairman, president and CEO of mega-dealer Rush Enterprises. “When it comes to ’23, we could sell everything, but we don’t know our pricing yet. Most OEMs are being a little bit tight about [pricing] out through ’23. It will continue to be a balancing act.”
Strong demand is a certainty.
“We’ve already forecasted this year at about 300,000 units for Canada, USA and Mexico, and while we haven’t yet put a number out, we forecast and we expect that demand next year will be stronger than this year,” Jonathan Randall, Mack Trucks senior vice president of sales, told a group of media last month.
