As most readers of this blog know, new emissions regulations went into effect on January 1, 2007. All Class 8 trucks meeting this standard are equipped with Diesel Particulate Filters (DPF’s). In addition, engine hardware and software were revised to varying degrees depending on OEM.
Now, here’s the rub. DPF-equipped trucks weren’t actually built to any large degree until well into calendar year 2007 and possibly even into 2008. This is because truckmakers were allowed to use pre-2007 engines that they had stockpiled prior to January, 2007. Thanks to the pre-buy that front-loaded truck orders into 2006, orders and build plummeted in 2007. As such, there were enough stockpiled engines to carry the pre-2007 engine build well into the 2008 model year.
From a used truck standpoint, model year 2008 is a challenge because some trucks include DPF technology while others don’t. We have parsed out our sales data as much as possible to differentiate between the two, but due to varying degrees of detail in our s ...
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The sleeper market looks to be off to a strong start so far this year. Preliminary February data puts the first two months of 2012 up $4052 (or 8.4%) over the same period of 2011, despite a substantial 33,237 (or 6.0%) increase in mileage. February’s preliminary average price of $48,655 is less than $1000 away from the record of $49,539 set in September, 2011.
On a month-over-month basis, the trend established in the second half of 2011 remains in place – namely, the market is tolerating pricing in the high-$40’s for sleeper tractors with mileage up to the mid-500’s. February’s preliminary results are on the high side of that rule of thumb, which paints a favorable picture of used truck demand.
Stay tuned for in-depth analysis of this and other data in the April edition of GuideLines, available around April 9th.
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Class 3-4 Cabovers have fared well so far in 2012, with a two-month average wholesale price of $10,442 ahead of 2011’s average by $1082 or 10.4%. Average mileage is similar, so we can eliminate that variable. Increased consumer spending is likely resulting in increased demand for daily rentals and urban deliveries – two of this segment’s main markets.
Class 6 Conventionals are still flat, with a 2012 average wholesale price of $12,395 behind 2011’s average by $607 or 4.7%. Average mileage for 2012 is close enough to 2011’s average to keep apples-to-apples comparisons valid. This segment is still exposed to weak sectors of the economy – namely, construction and residential services. Increased consumer confidence could lead to modest increases in spending on landscaping and light construction projects, but the ongoing foreclosure crisis will limit the rate of expansion.
In the short term, look for continued improvement in the lighter-duty cabover segment and flat to limited upward movement in the heavier ...
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A recent Transport Topics article (subscription required) states that wholesale truck dealers are seeing a drop-off in sales. As we mentioned in last month’s GuideLines, auction and dealer wholesale sales reported to NADA showed a 30.8% drop in volume from 2010 to 2011 (see graph). However, after a steep drop in the first three quarters of 2010, volume leveled out at a 2400 sales/month average, which is where is has remained up to the current period.
Given the steady volume throughout 2011 combined with the upward trend in wholesale pricing, we do not attribute the shifting volume to lack of demand, but rather the well-known lack of supply of low to average mileage trucks. Just like the retail market, the wholesale market is constrained by a lack of supply of low to average mileage trucks.
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In this month's edition of Commercial Truck Guidelines, you'll find that late-model sleeper tractors finally level after a record-setting retail high. Demand remains extremely strong for low-mileage sleeper tractors. The spread between low and average mileage iron continues to widen because demand for low-mileage units still greatly exceeds supply. However, as discussed in a previous blog post, buyers still place a premium on traditionally-styled sleeper tractors even in this age when fuel economy is of critical importance. To read the full March edition of Commercial Truck Guidelines, download them here!
In January, 2012, the average retail selling price of four-year-old sleeper tractors was $72,108. This figure is $2589 (or 3.6%) ahead of the previous high point set in January of 2011, and is the highest since NADA began tracking this information. Average mileage was nearly identical in both periods, so this price increase was most likely driven by natural demand. See the graph below for a comparison of the past five years.
Look for an expanded analysis of this and other data in the March edition of GuideLines, available at the end of this week.