Class 8 truck orders slide in May

A seasonal slowdown and manufacturers’ caution to book more Class 8 truck orders than they can combined produce in May are little to change the picture of the new equipment.

ACT Research said its preliminary estimate of 14,000 orders is actually a slight increase given seasonality. Orders tend to go back in April-May.

However, uncertainty about the Russian invasion of Ukraine, interest rates, a possible recession, long backlogs and constrained production in the supply chain kept orders in tight territory, said Eric Crawford, ACT’s vice president and principal analyst.

“We’re coming at that time of year when orders tend to be seasonally weak as OEMs are typically yet to disclose their build schedules for the coming year,” Crawford said.

Class 8 l truck orderslike concert tickets

FTR Transportation Intelligence estimated preliminary May orders at 13,300, down 13% from April and 43% year over year. On a rolling 12 month basis, fleets have ordered 270,000 units. The month of May eclipsed November 2021 as the lowest order month in this cycle.

“The supply chain has improved slightly in recent months, but some of that progress has stalled due to disruptions in China and Russia,” said Don Ake, FTR vice president of commercial vehicles. “OEMs are not confident of increasing production in the second half of the year; Therefore, they cannot accept any further orders.

“It’s like selling tickets to a popular concert. In the beginning, the turnover is high because there are enough places. But in the end fewer tickets are sold because there are fewer seats to sell,” Ake said. “Orders could even drop below 10,000 in the summer months before the cycle begins for next year.”

The OEMs are quickly running out of building sites for 2022. Disruptions in the supply chain prevent enough trucks from being built to meet demand, even as freight demand begins to ease. Very few orders are booked for 2023 as the cost of raw materials and other components is inflated and variable, making accurate quoting difficult.

Positive assessment

Still, Paccar CEO Preston Feight offered an upbeat assessment at the company’s investor day on Wednesday.

“The market will be stronger for longer,” Feight said, citing pent-up demand and a likely order lead before expensive emissions regulations come into effect in 2024. Paccar, the parent company of Kenworth, Peterbilt and Europa’s DAF Trucks, is projecting deliveries of 44,000-48,000 trucks worldwide, up from 43,000 in the first quarter.

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