Preliminary new Class 8 truck orders in North America rose 139% in June over May, following rebounding freight rates to set a four-month high. But industry experts do not expect a sustained comeback until later this year.
The 16,000 orders more than doubled combined bookings in April and May. That’s when shelter-in-place regulations led to a near collapse of the economy. Orders exceeded the same month a year ago by 23%, according to ACT Research,
“North American Class 8 net orders were up against an easy year-ago comparison, when orders were under pressure from still large backlogs and rising equipment overcapacity,” said Kenny Vieth, ACT president and senior analyst.
June is typically a slow month for orders. They typically rise in the fall when large fleets place orders for delivery the next year.
Lower estimates
FTR Transportation Intelligence reported net orders of 15,500, a 130% improvement over May and a 20% improvement over a year ago. Net orders for the last 12 months stand at 158,000 units,. But that is less than half the number of new truck deliveries in 2019.
After near-record deliveries in 2018 and 2019, the industry predicted a 30% retrenchment in orders this year before the coronavirus pandemic. The latest estimates expect the pullback to exceed 50%.
“June’s order activity is good news, after last month’s disappointing number,” said Don Ake, FTR vice president of commercial vehicles. “We expected orders to average around 10,000 units for a few months. Now they have averaged 11,000 for the past two months. The Class 8 market is on the slow, steady recovery that matches our forecast.
“It is also encouraging that fleets are showing enough confidence in the economy to begin placing some viable orders,” he said. “The trend should continue. But a significant increase is not expected until October when the big fleets begin placing orders for 2021 delivery.”
Reduced production
The improved orders should help truck makers continue to produce at reduced levels, depending on the stability of supply chains. In Mexico, for example, COVID-19 infections are among the highest in the world. That threatens the flow of components made there.
Order volume should exceed the 10,000-unit mark monthly throughout the summer as freight volumes continue to improve, FTR said. But it is doubtful that July will match or exceed June orders, especially as U.S. COVID-19 cases are again spiking.
Preliminary North American orders for Class 5-7 medium-duty trucks improved 77% in June over May. However, they were down 20% from the year-ago June volume, ACT reported.
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