ACT preliminary data indicates strong February Class 8 net orders
Net orders for heavy-duty Class 8 commercial vehicles continue to maintain a strong growth rate, according to data from ACT Research, a provider of data and analysis for trucks and other commercial vehicles. In a preliminary reading of net orders for February, ACT reported that there were 24,300 units ordered in February, which is 3,000 less than January, which came in at 27,300 units and was up 320 percent from January 2010.
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Net orders for heavy-duty Class 8 commercial vehicles continue to maintain a strong growth rate, according to data from ACT Research, a provider of data and analysis for trucks and other commercial vehicles.
In a preliminary reading of net orders for February, ACT reported that there were 24,300 units ordered in February, which is 3,000 less than January, which came in at 27,300 units and was up 320 percent from January 2010.
“The industry is continuing in 2011 where it left off in 2010,” said Steve Tam, VP commercial vehicle sector for ACT, in a statement. “The strength in orders continues to restock industry backlogs and fuel increasing build as the industry moves through the year.”
This growth follows a 2010 which finished with a strong fourth quarter, with ACT officials noting that the uptick in orders continues to restock industry backlogs, setting the stage for significant production increases into 2011.
One primary reason for such a significant annual gain is because January 2010 was when the Environmental Protection Agency’s 2010 mandate for implementing federal emissions standards in heavy duty trucks. Trucks manufactured in January 2010 and beyond cost on average $8,000-to-$10,000 more than before these efforts went live. This resulted in a mini pre-buy towards the end of 2009, and in early 2010 there were not a lot of Class 8 truck purchases occurring.
In a recent interview with LM, ACT President and Senior Analyst Kenny Vieth said that truckers continue to universally say that they are not adding capacity. But he pointed out that there is a difference between adding capacity and getting capital expenditures back to where it needs to be.
“Generally, truckers have been at below maintenance level capex for the past two or three years,” said Vieth. “Ultimately, it is payback time, as trucks need to be replaced. In addition to the domestic side of the story, the order activity is broad-based, with all of the OEMs participating in all of the North American geographies and not just the U.S. Canada and Mexico are strong right now, as are non-NAFTA markets that are ordering trucks like crazy. It is broad-based, and we are seeing the same thing in the trailer market, with U.S. trailer orders being very robust over the past few months.”
Another factor influencing an increase in orders are increased freight volumes, coupled with truckers being profitable, and what Vieth described as the easing of credit conditions. And fleets are aging coupled with capex being neglected for a few years, which Vieth said has led to truckers having confidence that the recovery may be here to stay. He also said there is a belief that truckers can make capex investments without having to deal with another recession six months down the road.
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About the AuthorJeff Berman, Group News Editor Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman
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