As expected, U.S. sales of new Class 8 trucks finished the year with a strong December, making 2020 a better sales year than initially expected.
According to data received from industry analysts at ACT Research (actresearch.net), 21,700 new Class 8 tractors were sold on the U.S. market in December. That’s down 7.5% from the 23,456 sold in December 2019 — but in the context of a 30.5% drop in sales for the full year, the final month of 2020 was a strong one.
Context is important in a year-over-year comparison, too. While it’s true 2020 sales of 195,728 represent a decline of 30.5% from 2019 sales of 281,461, it’s important to note that 2019 was the best sales year in the last 13, and the second-best of the young 21st century. Only 2006 sales were higher, when carriers were “pre-buying” large numbers of trucks to avoid new, untested EPA emissions technology.
Since the year 2000, an average of just over 192,000 new Class 8 trucks have been sold each year. That puts 2020 sales at 1.9% better than average.
A total of 15,630 (75.8%) of the Class 8 trucks sold in December were fifth-wheel equipped tractors, while 6,070 were vocational trucks equipped with dump, trash, concrete or other bodies. That’s the highest percentage of tractors of the year, which reached a low in May when only 54.6% of those sold were road tractors.
For the full year, 72% of U.S. Class 8 sales were road tractors, compared to 28% destined for vocational work.
Orders for new trucks remained very high, with 43,100 submitted in December, according to ACT. That’s nearly double the number of trucks actually sold in the month. The total number of orders climbed to more than 142,000 for the fourth quarter, the second-best ever for orders.
Because more orders came in than can be built in a month, the backlog of orders continued to grow. Currently it would take more than seven months for the industry to build all the trucks now on order — and that’s with manufacturing facilities returning to pre-COVID production levels.
Of course, new tractors need trailers to pull, and the industry was ordering large numbers of those, too. ACT reported 42,500 new trailers were ordered in December, 140% of the total ordered in December 2019.
The robust market for new trucks is impacting the used truck market, too. ACT’s preliminary release of its State of the Industry: U.S. Classes 3-8 Used Trucks report showed that used Class 8 sales volumes rose 11% in December over November numbers and were 25% higher than December 2019 numbers.
The average sales price for used Class 8 trucks in 2020 was down 8% from the 2019 average. The average age of used trucks sold dropped by 8%, while the average mileage dropped 4% compared to 2019.
The U.S. Department of Transportation reported record numbers of registrations for new trucking authority in 2020, indicating that more drivers than ever made the decision to start their own companies. There were enough available used trucks, however, that the additional sales weren’t enough to drive pricing higher.
On the new truck sales front, Freightliner led the way for December as well as for the year, according to data received from Wards Intelligence (wardsintelligence.com). The company sold 6,979 Class 8 trucks in December, 32.6% of all Class 8 trucks sold. That was a decline of 730 (9.5%) from November sales of 7,709 and also a decline of 655 (8.6%) from sales in December 2019. Freightliner was the only OEM to sell fewer trucks in December than in November.
For the year, Freightliner sold 71,683 Class 8 tractors, good for 37.4% of the U.S. heavy-duty market.
Kenworth had a great December with sales of 4,218, besting November’s 2,588 by 63% and slightly better than December 2019, when 4,148 Kenworths were sold. Kenworth captured 19.7% of sales in December and took 15.7% of the Class 8 market for 2020.
Peterbilt showed a more modest increase with December sales of 3,270, up 22.1% from 2,588 sold in November. Compared to December 2019, sales were down 591 for a 14.8% decline. Peterbilt’s 15.3% market share for the month was a little higher than its 14.7% market share for the year 2020.
Together, Peterbilt and Kenworth captured 30.4% of the Class 8 market in 2020 for parent company PACCAR.
On a percentage basis, Mack had a huge December. Sales of 2,150 units more than doubled November sales of 1,057 for an increase of 103.4%. Compared to December 2019, however, sales decreased by 868 for a decline of 28.8%. Mack claimed 10% of the new Class 8 market in December and 7.5% for the full year.
Volvo also saw a good December, selling 2,018 trucks compared to November’s 1,430 for an increase of 41.1%. Volvo’s 9.4% of the market in December was down from 9.7% for the full year.
International sold 2,272 trucks in December, 425 more than November for an increase of 23%. The company claimed 10.6% of the market in December, down from its 2020 average of 12.1% (which was a decline from its 2019 average of 13.7%).
Western Star ended the year with December sales of 494, just two trucks more than November’s 492 for a 0.4% increase. Compared to December 2019, when 775 Stars were sold, sales were down 36.3%. The OEM’s market share of 2.5% in 2019 declined to 2.3% in 2020.
Large numbers of truck purchases and orders for more seems an indication that the trucking industry is bullish on the 2021 economy. Kenny Vieth, president and senior analyst for ACT, certainly is.
“When I look at the economy, the areas poised for the largest growth are those that provide freight,” he explained. “I’m extremely bullish. I would argue that trucking conditions in the coming year could be the best ever.”
In the meantime, a new administration in Washington could help — or hinder — industry growth. Some Democrats have complained about recent changes by the Federal Motor Carrier Safety Administration changes to relax hours-of-service requirements. Under the leadership of Biden appointee Pete Buttigieg as Secretary of Transportation, regulations could be revised and re-tightened.
Further, Biden has announced plans for additional economic stimulation, potentially resulting in more freight than is currently available.
In short, while no one can predict with certainty how the trucking industry will fare in 2021, indicators point to a very good year.