Preliminary July Class 8 orders hit lowest point in nearly two years, says FTR
August 06, 2012
Freight transportation forecasting firm FTR Associates recently reported that its preliminary data for July Class 8 truck net orders hit its lowest level since August 2010.
July orders—at 12,568 units—are down 32 percent annually, said FTR. The firm added that these orders, which comprise all major North American OEMs, are down 23 percent compared to June, which was also a weak month, and continue to “reflect soft demand” for Class 8 orders.
The three-month period of orders for May through July equates to 186,300 units on an annual basis, according to FTR data.
To put into perspective how sluggish orders are at the moment, annualized order numbers for the March through May three-month period was 216,700 units and the December-February period was 308,000 units, according to FTR data.
“While orders came in below expectations, they didn’t really surprise us,” said FTR President Eric Starks in a statement. “We have been forecasting slower sales of Class 8 vehicles in the second half of 2012 for some time, and the reported order numbers for July support our current outlook for the remainder of the year.”
that point, explaining in an
FTR Director of Transportation Analysis Jon Starks said in a recent interview that while things are sluggish on the orders front, they are not necessarily bad.
One reason for this disconnect, said Jon Starks, is that there was way too much optimism on the OEM side.
“They got ahead of themselves and saw things going in one direction much too fast, so when we get to the back half of 2012 we think there is going to be a significant reduction coming in terms of what the OEMs are doing,” he explained.
Unless there is a strong surge in orders in the next few months, Jon Starks said it is very likely OEM production numbers are going to have to come down. He also noted that a “weak spell” for orders in 2011 carried over into 2012, with OEM’s requiring time to sort through the net effect of orders.
Given that situation, he said it stands to reason that Class 8 sales will be sluggish for the next 6-to-12 months.
“At the beginning of the year OEMS were producing well above what the sales environment was and had built out quite a bit of inventory on the production side,” said Jon Starks. “Sales did not drop off, though, instead they were more sluggish than anticipated.”
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