The strength in new Class 8 orders belies a four-month slide in deliveries while used truck prices continue to fall, albeit more slowly as 2023 comes to a close.
Through the first 11 months of the year, the industry has delivered 242,881 new Class 8 trucks, 7.8% more than the same period in 2022, according to Ward’s Intelligence. But the year-over-year lead has shrunk each month since February when sales were 35% ahead compared with 2022.
This contrasts with ACT Research, which reported net orders for North America — not just the U.S. — at 41,732 units in November. The robust bookings led to a longer wait time for deliveries, currently about six months.
Vocational truck orders are rising, especially trucks equipped with dump, concrete, refuse and other bodies that depend on construction activity.
Only Navistar International saw higher sales in November
In November, according to Ward’s, all major manufacturers except Navistar International reported lower deliveries. The Traton Group brand reported 2,952 units sold, up 4.2% month over month from October but 2.1% below November 2022.
Market leader Freightliner reported 5,796 trucks sold, down 31.4% from November 2022. For the first 11 months, Freightliner sales were up 3.6%. Daimler Truck North America sibling Western Star sold 713 units, up 29.2% from a year ago and a proof point of the strength in vocational equipment.
Paccar Inc. brands Kenworth and Peterbilt reported month-over-month declines of 17.2% and 11.5%, respectively. They were down 18.2% and 11.5%, respectively, from a year ago. Paccar accounted for 29.2% of new truck sales through November, two-tenths of a percentage point below a year ago.
Volvo Trucks North America reported 1,980 Class 8 truck sales in November, down 10.5% from October and 6.6% below November 2022. Volvo is the only manufacturer with 11-month sales trailing the same period a year ago. Year-over-year sales are down 1%.
Sibling Mack Trucks reported 10.1% lower sales in November compared to October and a 20.7% decline from November 2022. Year-to-date Mack sales are up 11.4%.
Private fleets drive remaining pent-up demand
As the freight market finds the bottom of the cycle, order cancellations can rise. Fleets are obligated only when an OEM orders the materials to build a certain order.
“There may be some pent-up demand remaining for tractors,” said Kenny Vieth, ACT president and senior analyst. “If so, and given freight rates, it remains largely with private fleets.”
Slower sales has caused new truck inventories to rise, something dealers had not experienced in the previous two years as supply chain disruptions hampered truck production.
Used truck prices falling more slowly
After months of steep year-over-year declines, used equipment prices are falling more slowly.
Late-model trucks with average or lower mileage have lost less than 4% of their value each month in the fourth quarter, according to J.D. Power Valuation Services. Higher-mileage trucks likely have experienced the worst of their devaluation.
Four-to-6-year-old trucks sold for 3.9% less than in October and 40.2% less than November 2022, Power said in its December Guidelines newsletter. In the first 11 months of the year, late-model sleepers sold for 41.6% less than the same period of 2022. Monthly depreciation in 2023 has fallen to 4%.
Values for the newest model years available at auction remain just under the strong pre-pandemic period of 2018 or about 20% less if adjusted for inflation.
Retail used equipment prices fell across the board in November
While individual models varied, each year Power tracked for retail used truck prices reported substantial decreases in November.
The average sleeper tractor sold for $62,252, was 71 months old and had 429,243 miles. Compared with October, the average sleeper was the same age, had 7,984 (1.8%) fewer miles and sold for $5,189 (7.7%) less. Compared with November 2022, the average sleeper was two months newer, had 40,249 (8.5%) fewer miles and sold for $27,558 or 30.7% less.
The declines ranged from 3.2% to 13.9% depending on the model year.
“Excess truck inventory will continue to filter through auction, wholesale and retail channels through the first half of 2024, but the post-pandemic correction looks to be maturing,” Power reported.
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