COLUMBUS, Ind., and BLOOMINGTON, Ind. — According to preliminary figures from ACT Research and FTR, net orders of Class 8 trucks declined in May. Both agencies will publish final data for May in mid-June.
ACT’s State of the Industry: Classes 5-8 Vehicles report shows 14,000 net orders of Class 8 trucks for the month, while orders for Class 5-7 trucks were 17,000 units.
According to Eric Crawford, vice president and senior analyst at ACT, orders of new trucks tend to be weaker this time of year because OEMs typically have not yet opened their forward-year build schedules.
“May’s sequential decline in Class 8 orders from April actually reflects some mild improvement on a seasonally adjusted basis,” he stated. “So, despite broader macro uncertainty about Russia/Ukraine, interest rates and potential recession, the prevailing theme in trucks is largely unchanged — long backlogs and supply-chain constrained production continue to keep new orders trending within a narrow range.”
FTR reports are not as optimistic, noting that preliminary Class 8 net orders for May dipped to 13,300 units — the lowest total since November 2021 — and were down 13% from April and down 43% from May 2021.
That’s not to say demand for new trucks is low, according to Don Ake, FTR’s vice president of commercial vehicles.
“Demand for new trucks remains healthy,” he noted. “Freight is growing and fleets need more trucks to keep up with customer demands and to trade in older vehicles. The supply of new trucks has been running way behind demand for over a year now and many fleets need to catch up to their replacement cycles.”
Both Crawford and Ake point to shortages of parts and materials, as well as supply chain snarls, as key issues for vehicle manufacturers.
“With Class 8 backlogs stretching through 2022 and still no clear visibility on the easing of the all-things shortage, May’s net orders reflect a mild upside surprise, albeit one still in line with the ongoing conservative approach by OEMs looking to limit the risk of overbooking and underbuilding that plagued the industry in 2021,” Crawford said.
“The supply chain was making slight improvements in the last few months, but some of that progress stalled due to disruptions in China and Russia. The OEMs are not confident they can increase production in the second half of the year; therefore, they are not able to take more orders,” Ake noted.
“This is like ticket sales for a popular concert,” he continued. “At the beginning, sales are high because there are plenty of seats available. But at the end, fewer tickets are sold because there are fewer seats to sell. There just aren’t many build slots still open in 2022. Orders could even slide under 10,000 in the summer months before the cycle begins for next year.”
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