The seasonal slowdown and manufacturers’ caution in booking orders for Class 8 trucks larger than they can produce combined in May to make little difference to the picture for new equipment.
ACT Research said its initial estimate of 14,000 applications was actually a slight increase given seasonality. Orders usually drop from April to May.
However, uncertainty over the Russian invasion of Ukraine, interest rates, a potential recession, a long backlog and constrained supply chain production kept new orders trending within a narrow range, said Eric Crawford, ACT vice president and senior analyst.
“We have reached that time of year when orders tend to be seasonally weak, as OEMs have not yet opened up their build schedules for future years,” Crawford said.
Class 8 truck orders such as concert tickets
FTR Transportation Intelligence pegged initial orders for May at 13,300, down 13% from April and down 43% year over year. On a 12-month rolling basis, fleets ordered 270,000 units. May’s total surpassed November 2021 as the lowest-ranking month in the cycle.
“The supply chain has been making slight improvements in the past few months, but some of that progress has been halted by disruptions in China and Russia,” said Don Ackie, FTR vice president of commercial vehicles. “OEMs are not confident in their ability to increase production in the second half of the year and, therefore, are unable to take more orders.
“This is similar to ticket sales for a popular concert. At first, sales are high because there are a large number of seats available. But in the end, fewer tickets are sold because there are fewer seats to sell.” Orders may drop to less than 10,000 in the summer months Before the course starts next year.”
OEMs are quickly running out of build slots for 2022. Supply chain disruptions are preventing enough trucks from being built to meet demand even as freight demand begins to slow. Very few orders are booked for 2023 because the costs of goods and other components are inflated and variable, making accurate pricing difficult.
Optimistic assessment
However, Paccar CEO Preston Fayette offered an upbeat assessment at the company’s investor day on Wednesday.
“The market will be stronger for a while longer,” Fayette said, pointing to pent-up demand and a potential increase in orders before expensive emissions regulations take effect in 2024. Paccar, the parent company of Kenworth, Peterbilt and European DAF Trucks, is planning the projects. Between 44,000 and 48,000 trucks were delivered globally compared to 43,000 trucks in the first quarter.
Related articles:
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Never be scammed again: Manufacturers avoid overbooking on Class 8 orders
Class 8 Truck Orders for February: ‘You Can’t Always Get What You Want’
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