“There’s been an awful lot of deferred capital investment on the part of carriers over the last few years and so we’re really only at the start of this replacement trend,” Kenny Vieth, president and senior analyst for ACT Research, told Fleet Owner.

“If you look at Class 8 retail sales in the U.S. for 2011, for example, our numbers indicate some 175,700 units were sold,” he said. “But our nominal replacement demand number is 180,000 units annually, so even though sales were up last year, we did not reach the industry’s nominal replacement level for the full year.”

So far in 2012, North American orders for commercial trucks are strong, with heavy-duty Class 8 orders topping 25,200 units in January, while medium-duty Class 5-7 orders were just over 13,500 units for the same month, according to ACT.

“There were no surprises with the level of order intake in January,” Vieth added, noting that both sets of preliminary net orders still support the firm’s North American production forecast of 295,000 to 300,000 Class 8 units this year, along with 175,000 to 180,000 medium-duty units.

Dan Sobic, executive vice president of Paccar, the parent company of Peterbilt Motors Co. and Kenworth Truck Co., said in the company’s fourth-quarter earnings report that annual replacement demand for the U.S. and Canadian truck market is estimated to be approximately 225,000 units.

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“With orders and production in line, there is nothing to suggest an upwards move from current production levels, at least not until we know the outcome of peak season orders,” said Frank Maly, director of CV Transportation Analysis & Research with ACT”.

“Component availability appears to have reached a comfortable equilibrium with current production rates”, he added.

ACT is a worldwide publisher of new and used commercial vehicle (CV) industry data, market analysis and forecasting services for the North American market, as well as the U.S. tractor-trailer market and the China CV market.

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While orders for heavy trucks remain strong, despite uneven freight volumes and slowdown in the U.S. economy, the manufacturing capacity to build them may have reached a ceiling of sorts – particularly due to the limitations of second and third tier suppliers.

“There’s been a shortage of axles and tires for quite some time, but there’s also a growing dearth of other sub assemblies as well,” Steve Tam, vp-commercial vehicle sector for ACT Research Co., told Fleet Owner.

“There’s a modicum of conservativeness as well among the major OEMs in the truck manufacturing space, but the production limitations really revolve around the limitations of those suppliers,” he added.

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COLUMBUS, Ind. — After several consecutive spikes in trailer orders, total net orders fell for the second straight month (9%) during May.

Despite that decline, commercial trailer backlogs continued to grow, ending the month at 102,500 units, up 1 percent from April, reports ACT Research Co.

ACT also noted that build was up 87 percent from May 2010, while industry backlog was up 122 percent for the same time period.

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Company Buys First and 500,000th Volvo from Virginia-Based Production Line

DUBLIN, VA – The 500,000th truck built by Volvo Trucks North American (VTNA) is going home with the same company that bought the very first unit to roll off Volvo’s New River Valley production line here in Dublin, VA: Wilson Trucking.

Brothers Chuck Wilson and T. Guy Wilson – the chairman and president, respectively, of Fishersville, VA-based Wilson Trucking – were on hand to receive the keys to their new Volvo VNL 300 daycab tractor. It shared the stage with the very first Volvo truck bought by the family-owned carrier in 1982, an F7 tractor, which Wilson Trucking only recently retired from active service.

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In easily the most upbeat release in years of its ACT North American Commercial Vehicle Outlook, ACT Research Co. (ACT) said today that the “fundamentals that support heavy-duty commercial vehicle demand are all signaling the start of an upcycle for the market.” The forecasting firm backed that highly positive statement up by reporting that net orders for both Class 8 vehicles and commercial trailers “surged in the last quarter of 2010, indicating trucking fleets are ramping up replacement of vehicles that has largely been deferred the past two years.”

“The combination of rising freight volumes, improving trucker profits, rising used equipment values and the oldest North American fleet on record have led to a resurgence in demand for new commercial vehicles,” pointed out Vieth, president & senior analyst with ACT Research.

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Opened by Great Dane in September 2002, the Jonesboro facility has a history of reaching production goals and achieving high levels of safety performance. Production is expected to ramp up over time.

Bringing the Jonesboro plant back online, after being idle since Oct. 22, 2009, is a continued improvement in business and growth in orders for dry freight vans. According to industry reports, dry freight van net orders have experienced healthy increases after a period of historic decline.

This may be the worst of times for commercial truck trailer sales — and the worst of times is expected to continue well into 2010, according to a variety of sources.

Eric Starks, president of research firm FTR Associates, predicts that trailer production should remain at “depressed levels” through the end of 2009 and only see a modest recovery next year. He forecasts that a large oversupply of trailers will act as a continuing drag on new trailer demand, resulting in very weak total 2009 production numbers of 70,000 units for the industry as a whole, improving only modestly to 89,000 units in 2010.

“At the moment transport demand is so weak that in fact the trucking industry as a whole actually does not need any new trailers at all,” he said during a speech at the annual meeting of the Truck Trailer Manufacturers Association (TTMA) earlier this month.

Trailer OEMs are being hammered by such low levels of demand. Wabash National Corp., for example, reported a net loss of $28.3 million on net sales of $77.9 million during the first quarter this year, compared to a net loss of $6.4 million on net sales of $161.1 million over the same period in 2008.

Dick Giromini, Wabash’s president and CEO, said in the company’s earnings statement that its new trailer sales in the first quarter this year totaled just 2,700 units, representing a 57% reduction from the same period in 2008.

“The volume decline reflects the current economic environment and the continuing challenges facing the transportation industry,” he noted. “Results for the first quarter … while disappointing, were not surprising. The challenging economic climate has resulted in weak production demand, and the carryover effect of very high raw material and component costs adversely impacted our operating results.”

Even sales of used trailers are slumping, according to truckload carrier Werner Enterprises. In its first quarter earnings report, the company reported that its wholly-owned subsidiary, Fleet Truck Sales, showed sales of assets — primarily used trucks and trailers — decreased to just $700,000 in the first quarter of this year, compared to $3.7 million in the first quarter of 2008. Werner said it sold fewer trailers due to the effect of the softer freight market and experienced lower buyer demand for used trucks as well.

[source - fleetowner.com]

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