America's Heavy-duty Truck Sales Bounces Back in December
Published On Jan 11, 2016
Heavy-duty truck orders bounced back in December post the downfall of freight market. The market analysts foresee the stability following a strong growth in tractor orders.
In December, the trucking companies ordered a total of 27,800 heavy machines, which shows 70% increase from November. Meanwhile, the total orders received last month were still 37% lower compared to last year.
Don Ake, the Vice President of commercial vehicles at FTR stated, “December's relatively strong orders for new Class 8 rigs, as the biggest trucks are called, indicate trucking companies are returning to historic norms when it comes to investing in their fleets.” He also added, “For first time in a long time we are coming back into a rational, reasonable market.”
As the economy was increasing in the late 2014, several carriers spent largely on expanding and upgrading their fleets hoping for a strong customer demand. But due to a fall in freight volumes, some of the new trucks were out of service, and this led to a downturn in new orders. The companies kept the new purchases on hold until there was a clear view of the future demand.
Analysts are optimistic about a growth in sales, although they are not expecting these figures to reach the high that was witnessed in the late 2014 and early 2015. However, most of the truck makers have called for layoffs, with an intention to cut down production. Daimler AG, which owns Freightliner, has also stated about its plans of cutting jobs at a plant in North Carolina.
An investment bank, Stifel forecasts about 2,50,000 truck orders in 2016, which is 24% low from the last year. According to the Stifel analysts, the rise in orders is an indication that the truck production will go on, but that does not mean the industry will be back in the race again as the hard times in 2016 are still significant.