By Steve Latin-Kasper
NTEA Director of Market Data & Research
stevelk@ntea.com
This article was published in the February 2016 edition of NTEA
News.
In December 2014, commercial truck sales were expected to grow at a
faster pace in 2015. The prediction was correct, but only for the first quarter
of the year, where sales rose at an 18.8-percent rate. This was a large jump
from the 1.5-percent growth rate registered in the fourth quarter of 2014, and
twice the annual 9.1-percent rate — but it didn’t last. In the second and third
quarters, sales rose at 4.6-percent and 2.3-percent rates,
respectively.
This deceleration factored into 2016 forecasts. As shown in the chart
above, which illustrates the December update to the IHS forecast presented at
NTEA’s Executive Leadership Summit in October 2015, changes differ substantially
by market segment. Light-duty (Class 1–2) projections had the
most revisions. Sales are still expected to grow through 2019, but not as much
as anticipated. Forecasts for this segment are driven by pickup sales, which
were not as strong as estimated earlier in 2015.
Classes 1–2
The forecast update was made before
December data was released, but it still makes clear that earlier forecasts were
overly positive. Class 1–2 sales predictions of 2.415 million units in July were
200,000 units greater than the September forecast, which was still too high.
Revising sales down to 2.163 million units for 2015 led to a decline in the
forecast through 2019. Class 1–2 sales projections remain positive, just not
much as originally anticipated.
Classes 3–5
Class 3–5 commercial truck sales are
also expected to continue growing through 2019. The forecast for this
segment, though, has improved. While not drastic, the change
between September and December is consistently positive.
Classes 6–7
This is also the case for the Class
6–7 segment. IHS determined its 2015 predictions were too high, but knew it
needed to have even greater expectations for 2016–2019. Class 6–7 sales are now
expected to grow more than twice the rate of Class 1–5 sales in 2016 and five
times the rate in 2017.
Class 8
After rising almost 15 percent in 2015,
Class 8 sales are projected to decline for the next three years. The forecast
was negative as of September, with October and November data offering further
justification for lower expectations. The December update to the IHS forecast
predicts Class 8 sales declines for the next three years, from a 2015 unit total
of 252,000 to 199,000 in 2018. Sales should level off in 2019.
It’s important to note Class 8 needs to be split into two segments.
Historically, tractors compose about 70 percent of the total, with straight
trucks accounting for the rest. Tractors and straight trucks are not used in the
same application markets, which means the forecasts for the two vehicle types
can be different. This is likely to be the case in 2016 and 2017 as Class 8
straight truck sales continue benefiting from increasing construction sector
activity. Their sales could be flat to 5 percent up in 2016, while tractor sales
fall 10–15 percent.
In total, Class 3–8 commercial truck sales are expected to grow about
0.5 percent in 2016. Removing Class 8, Class 3–7 sales are projected to rise
almost 5 percent. In other words, most of the work truck industry should
continue progressing this year and beyond. This is in line with forecasts for
the U.S. economy and the industry’s two largest application markets — the
construction sector and state/local governments.
If you have any questions about the information in this article,
contact Steve Latin-Kasper at 248-479-8193 or stevelk@ntea.com.