The confidence of OEMs and component suppliers to the trucking industry seems to be rising as sales and revenues of heavy trucks and related equipment show no signs of letting up this year, with declines in 2007 now projected to be milder than expected.

“Truck fleets are earning record profits and have increased their demand for current year truck models,” said shared Tom Plimpton, president of Paccar, parent company of truck makers Kenworth and Peterbilt. “We expect U.S. and Canadian Class 8 sales to be 310,000-320,000 units for 2006 … with expected 2007 industry retail sales to be at a reasonable level of 200,000-250,000 units, as the industry acclimates to the higher powertrain costs required to meet EPA ‘07 emission regulations.”

He added that a vibrant U.S. economy, with gross domestic product (GDP) growth predicted to be nearly 3% next year, should have a positive impact on new truck demand that should offset higher component costs.

“We’re on track for 2006 to be a record year for us in terms of truck deliveries and parts, service, body shop and finance and insurance revenues,” said W. Marvin Rush, chairman of San Antonio Peterbilt dealership chain Rush Enterprises

Though Rush stressed that new emissions standards governing diesel engines will significantly decrease in truck deliveries in ’07, he expects a strong rebound. Specifically, the company expects second and third quarter ‘07 deliveries to be down more significantly compared to ‘06 than deliveries in the first quarter of ’07.

“We expect the market to begin to rebound in the fourth quarter of ’07, followed by strong markets in ‘08 and ‘09 as customers pre-buy trucks in advance of even more stringent diesel engine emissions standards that will go into effect in 2010,” he said.

Other suppliers are just as confident about the prospects for the rest of ’06 and ’07.

“We had a terrific second quarter and remain on pace for a record ‘06," said Tim Solso, chairman & CEO of engine maker Cummins.

Demand for North American heavy-duty engines remained strong, with shipments up 14% from the same period in 2005.

ArvinMeritor is benefiting from strong truck sales as well. “Our sales for fiscal ‘06 remain strong, specifically within the North America Class 8 truck market, and we’re forecasting full-year sales to be approximately $9 billion,” said Chip McClure, the company’s chairman, president & CEO.

Peoria, IL-based Caterpillar upgraded its outlook for remainder of ‘06, with total sales and revenues now expected to be up 12% to 15% over last year in part because demand for heavy truck engines isn’t letting up.

That optimism is coming from strong North America sales that increased 18% to for the second quarter to $221 million, driven in part by strong truck engine sales as purchases of on-highway trucks increased 5%.

“We are entering the fourth year of a recovery that began in mid-2003,” said Jim Owens, Caterpillar’s chairman & CEO. “The industries we serve continue to be very strong throughout the world. While it's tough to predict the future, historically global industry recoveries have lasted six to eight years, and a variety of factors, particularly past under investment, should help sustain this recovery.”