When it comes to sales of new Class 8 trucks on the U.S. market, 2022 ended up as the third-highest sales year of the past 20 years, thanks to a record-setting December. Production delays in the first quarter, brought about by supply chain issues that slowed delivery of parts and materials were largely solved as the year progressed.
According to data received from ACT Research 29,497 Class 8 trucks were sold in the U.S. in December, an increase of 17.8% over December 2021 sales. Compared to November 2022, sales leapt by 24%.
Of the December total, 22,328 trucks were destined for over-the-road use while 7,169 were slated for vocational use as dump, trash, concrete or other trucks.
December is typically the strongest truck sales month of the year because it closes out the business year for most carriers and marks the end business quarter for all of them. Reinvestment of profits into new equipment reduces a carrier’s tax liability for the year as well as quarterly shareholder dividends. In today’s economy, buying new equipment helps carriers prepare for a potential recession by reducing the number of trucks they’ll need to buy when times are rough.
“Everybody who can invest capital at the end of the year to save on some taxes is going to do it,” said Eric Crawford, vice president and senior analyst at ACT Research.
“Seasonality aside, this is the best December on record,” he said. “And I think this speaks to unmet demand over the course of the cycle. The peaks in production haven’t come close to the peaks in orders.”
ACT reported U.S. Class 8 orders of 26,735 for December, the fourth consecutive month of high orders. The December number is 41% higher than orders in December 2021 and brings the current backlog of trucks waiting to be built to 210,241 for the U.S. market alone. If no further orders were received, it would take over 7.5 months just to build the trucks already ordered.
With predictions of a recession popping up nearly everywhere, both purchases and orders must slow down at some point, but when?
“I think for 2023 the key theme is going to be rebalancing and rebalancing is going to come thanks to a recession,” Crawford said.
Inflation has raised costs for both manufacturers and consumers, who are responding with slower buying. Higher interest rates, imposed by the Federal Reserve Bank in hopes of reigning in inflation, have increased the cost of credit. Taken together, those signs point to less product being shipped, reducing the demand for trucks and increasing rate competition for available loads.
The inflation rate has moderated somewhat in recent weeks but isn’t falling fast enough to avoid an impact on the economy. Crawford says ACT predicts any recession will be mild.
“We saw some risk of a deeper recession, but we’re in the mild camp, given some of the good news that we’re seeing on inflation,” he said. “We don’t expect the Fed to cut rates at any at any point in 2023, but certainly they don’t need to ratchet rate nearly as much in ’23, as they did in ’22. That deceleration is going to help the recession be relatively short lived and mild. That’s our expectation.”
On the used truck side of the market, retail volumes increased by 20% in December over November but were still far behind (25%) December 2021 sales numbers. The average retail price of a used Class 8 tractor declined by 3% from last December, while the average age of used trucks moved increased by 2%. Trades by carriers receiving more new trucks would tend to place more used trucks on the sales lots, even as carriers keep them on the road a little longer while waiting for new equipment to arrive.
For December, new truck sales were more newsworthy. According to data from Wards Intelligence, December sales topped the next-best December of the 21st century — the EPA pre-buy year of 2006 — by 2,752 trucks (10.4%).
Freightliner sold 10,660 Class 8 trucks in the U.S. in December, bringing its 2022 total to 96,573, good for 37.9% of the U.S. market. Compared with 2022, Freightliner sales increased 15.4%. Freightliner sibling Western Star held a much smaller share of the 2022 market at 2.6%, but December sales of 764 represented an increase of 51.9% from last December’s results. The company reported sales of 6,509 for the year.
International finished the year strong with sales of 3,612 in December, topping December 2021 sales of 1,314 by 175%. For the year, International sales rose by 21%, while the market as a whole rose 14.7%. Navistar was acquired by the Traton Group in July 2021, and the changes made undoubtedly impacted sales for 2022. The company’s share of the U.S. market grew from 11.9% in 2021 to 12.5% in 2022.
Kenworth sales in December of 4,528 brought the company’s 2022 total to 36,730, up 13.7% from 2021 and good for 14.4% of the U.S. market. PACCAR sibling Peterbilt sold 4,624 in December to bring its 2022 total to 38,782. Compared with 2021, Peterbilt Class 8 sales on the U.S. market rose 18.2% and comprised 15.2% of total U.S. Class 8 sales.
Volvo sales of 2,590 in December brought the company’s 2022 total to 26,994, a 22.1% increase over 2021 — the largest percentage increase of all the OEMs. Volvo’s share of the U.S. Class 8 market rose from 10% to 10.6%.
At Volvo-owned Mack Trucks, however, things weren’t as rosy. December sales of 2,436 Class 8 Macks were 79.6% higher than December 2021 sales but weren’t good enough to bring sales for the total year 2022 into positive territory. Mack sales declined 8.7% for the full year, the only major OEM to lose ground compared with 2021. Mack’s market share slipped from 8.4% to 6.7%. It’s important to note that a large percentage of Mack Class 8 trucks go to the vocational market, supplying the trash, concrete and dump markets, as opposed to the over-the-road market. That’s a different type of buyer, and that may have impacted sales during a turbulent year.
If predictions hold, it will be at least a few years before we see December sales like in the last one — or another sales year to top 2022.
Cliff Abbott is an experienced commercial vehicle driver and owner-operator who still holds a CDL in his home state of Alabama. In nearly 40 years in trucking, he’s been an instructor and trainer and has managed safety and recruiting operations for several carriers. Having never lost his love of the road, Cliff has written a book and hundreds of songs and has been writing for The Trucker for more than a decade.