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Truck sales expected to drop — but maybe to normal levels

Posted: August 21, 2019 by John G. Smith

Richard Howard, Daimler Trucks North America

Richard Howard, the senior vice-president of sales and marketing for Daimler Trucks North America, expects the truck market to soften in 2020. But the OEM still expects strong demand in a historical context.

YOUNTVILLE, Calif. – Truck sales may be projected to slow in 2020, but Daimler Trucks North America believes the totals will still reflect strong demand overall.

The OEM is projecting about 480,000 Class 6-8 truck sales in Canada, the U.S., and Mexico this year, and somewhere between 380,000 and 400,000 in 2020.

“We’re coming off super great years in truck sales,” senior vice-president of sales and marketing Richard Howard says, putting the lower numbers into perspective. The projections for 2020 are still higher than the annual average over the last 10 years, which would represent around 375,000 trucks.

“Obviously the pitch of the decline is fairly steep, but I think overall the expectation is that large fleets will continue to stay with their normal kind of order cycle … and consumer demand is fairly robust overall,” he told Today’s Trucking, following a briefing to North American media. “I know there’s been some pressure on spot price in the freight market, but our larger customers, they still see a steady season as we’re coming through the back end of 2019.”

The Daimler executive says larger customers are also expecting the freight market to remain steady in the remaining months of this year. Truck orders are also in the range of what people would expect, he added.

ACT Research senior analyst Kenny Vieth sounded decidedly less optimistic about the truck market when offering recent forecasts for the year ahead. He reported that heavy truck production is expected to drop as early as the fourth quarter of this year.

“Carrier profitability and production peaks always lag the freight cycle, so capacity building always accelerates relative to freight growth at exactly the wrong time, every time,” Vieth said. “Large new inventories and deteriorating freight and rate conditions suggest erring on the side of caution.”

In the meantime, Daimler is running at maximum production levels, and Howard says the OEM is selling every truck it can build.

The new Cascadia has been one of Daimler’s most successful product launches in North America, with 170,000 units now of the road. “Our Class 8 performance year-to-date has been very good,” he said. The truck is also being introduced in other markets as far afield as Australia and Chile.

Integrated Detroit powertrains are now spec’d by 19 out of 20 customers, while seven out of 10 buyers are opting for Detroit Assurance safety systems.

Howard wouldn’t offer projections about the share of customers expect to adopt the newly available Level 2 autonomous controls, which offer steering support, but the OEM is actively demonstrating the capabilities in sessions with customers.

“Even though fuel economy is super important, active safety systems have a high priority for our customers,” he said.

Freightliner is clearly dominating Canada’s Class 8 sales, with just over 30% of the 19,688 vehicles sold as of July, Wards Auto reports. The total is marginally higher than the 19,511 Class 8 trucks sold last year at this time.

Canadians consumed 4,576 Class 7 trucks, 980 Class 6 vehicles, and 4,724 Class 5 units as of this July.

 

 

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