Setting the truck sales mark

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"We are encouraged by the continuing improvement in Class 8 and medium-duty truck orders during the past several months.” –W. M. "Rusty" Rush, president and CEO, Rush Enterprises, Inc.

One of the hardest things to do in the truck making and selling business is to predict future sales volume – a task only made harder by a growing plethora of government regulations that continues to escalate the sticker prices of new heavy- and medium-duty commercial trucks.

Yet predictions need to be made, for without them, plans can’t be laid.

W. M. "Rusty" Rush, president and CEO of national truck dealership chain Rush Enterprises, Inc., made his educated guess this week concerning commercial truck sales this week with the release of his company’s annual financial report.

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“While U.S. Class 8 order intake has reached over 25,000 units for three consecutive months, retail sales are not expected to substantially increase until later in 2011, causing the new truck sales market to remain competitive and challenging throughout the first half of the year,” Rush said.

“Industry experts forecast 2011 U.S. Class 8 truck sales to reach 179,000 units, up from 110,109 units sold in 2010. Current industry projections are for U.S. Class 4-7 retail sales in 2011 to be 128,300 units, up from 117,572 units in 2010,” he added.

“If economic conditions continue to improve, we expect that activity will increase in automotive and capital goods manufacturing as well as residential and commercial construction, which should result in strong truck sales markets in 2012 and 2013,” Rush noted.

Dan Sobic, executive vp for global truck maker Paccar -- which owns Peterbilt Motors Co. and Kenworth Truck Co. -- proved more circumspect in the company’s annual report issues earlier this month.

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“Industry retail sales in 2011 are expected to increase to a range of 180,000-200,000 vehicles, reflecting a continued economic recovery and the need to replace an aging truck population,” he noted. “[But] this projected sales level is still below normal replacement demand of approximately 225,000 units.”

That last part is the critical factor, though: new truck sales are not projected to reach what industry insiders called “replacement demand” levels this year. So while sales will be up, they won’t be up as high as they normally should be.

"We are encouraged by the continuing improvement in Class 8 and medium-duty truck orders during the past several months,” Noted Rush. “[But] we believe this increase in new truck orders reflects the replacement of existing aged trucks that are currently in service and does not reflect fleet expansion or growth.”

There you have it. The marks have been set. Now we need to see how close the actual sales figures come to meeting the predictions.

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