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Truckinginfo | FTR Conference: Class 8 Sales Declining, Mediums, Trailers Still Good

02.18.16 | Tom Berg, Truckinginfo

“This is a market where things aren’t expected,” said Eric Starks, chairman and CEO of FTR Associates, in introducing several hours of presentations during which speakers explained why things are similar to past recoveries and why they’re different.

Starks moderated the equipment half of FTR’s on-line virtual conference Tuesday afternoon, Feb. 16, where presenters said outlooks for truck and trailer orders and sales continue strong and steady, though lower than highs reached by Class 8 sales last year.

And, barring an unexpected recession, that will continue into 2017. Equipment business has paralleled growth in the general economy since the Great Recession ended in 2010. But medium-duty trucks and semitrailers are hanging on longer.

There’ll be extensive productivity gains through telematics and other technologies, presenters said. But don’t celebrate, because those very technologies will greatly reduce demand for trucks, possibly by the beginning of the next decade.  

Class 8 trucks moderate

Sales of new heavy duty power units began moderating toward the end of 2015, as buyers adjusted orders placed during “better times” earlier in the year, said Chris Visser, senior analyst and product manager for commercial vehicles at NADA Used Car Guide, an arm of J.D. Power  Associates. And they are trading in large numbers of three- to five-year-old tractors that has caused a drop in values.

“Quite a few more trucks were coming in 2015,” he said. “Lots of companies sent trucks to no-reserve auctions in mid ’15, which caused used-truck prices to fall,” and dealers must adjust.

“Dealers who had become accustomed to strong used-truck prices have to get used to lower, more normal prices,” he said. “They’re now in an adjustment period that began rather suddenly, with a shock point in mid-2015.”

Wholesale values of 2011 to ’13 trucks dropped 25% from August to the end of the year. Retail prices dropped 10% as dealers resisted losing so much money, Visser said. Prices of 2014 and later models, though, have remained strong.

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