Fleetowner 2165 Hebe Trucks Sm
Fleetowner 2165 Hebe Trucks Sm
Fleetowner 2165 Hebe Trucks Sm
Fleetowner 2165 Hebe Trucks Sm
Fleetowner 2165 Hebe Trucks Sm

More orders than trucks

May 16, 2011
Truck manufacturers will experience “a big gap between order intake and actual build” for medium and heavy-duty trucks in 2011, according to Jim Hebe, Navistar sr. VP for North American operations.

Truck manufacturers will experience “a big gap between order intake and actual build” for medium and heavy-duty trucks in 2011, according to Jim Hebe, Navistar sr. VP for North American operations.

Truck makers may see an increase in new truck orders beyond already strong numbers, “but they won’t get built because of [capacity problems with] the supply base,” Hebe said at a recent press briefing. “We can’t raise production much beyond where we are right now because of supply issues.”

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The problem lies with Tier 2 suppliers that build parts and components for the OEMs’ Tier 1 suppliers, according to Hebe. “With Tier 2 suppliers struggling, the Tier 1’s can’t deliver,” he said.

Fleet purchasing habits for new Class 8 tractors have also been changed by the recent economic downturn, according to Hebe. “No one is adding capacity, they’re just buying replacements and then only if it makes good business sense for them,” he said.

With fleets shedding capacity in the last few years, the annual North American Class 8 replacement level has dropped substantially, he added. “It was about 200,000 to 220,000, but now it’s down to 160,000 to 180,000,” Hebe estimated.

Because new emissions technology have added substantially to cost, “fleets also haven’t adjusted to the price of 2010 trucks yet,” Hebe said. “It will take three or four years before the impact [of the higher price] is completely rolled into fleet business plans.”

Although last year he predicted strong medium-duty truck sales for 2011, numbers are running even ahead of his expectations, Hebe said. North American Class 6 and 7 truck sales are now expected to hit 60,000 units, with school buses adding another 20,000, he forecast.

“Leasing companies are accounting for 35% of those sales,” Hebe said. “I hadn’t expected that, but strong used truck prices are driving them to renew their fleets now. A resurgence in small business is also driving the leasing companies purchases.”

About the Author

Jim Mele

Nationally recognized journalist, author and editor, Jim Mele joined Fleet Owner in 1986 with over a dozen years’ experience covering transportation as a newspaper reporter and magazine staff writer. Fleet Owner Magazine has won over 45 national editorial awards since his appointment as editor-in-chief in 1999.

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