Category: Market Analysis and Forecasts
Market Analysis and Forecasts
After a promising first quarter, April’s wholesale results show a mild decrease in wholesale pricing for our sample population of Class 4-6 Conventionals. Volume was down as well.
Specifically, compared to March, Class 4 was down $538 (or 3.8%), Class 5 was down $978 (or 5.4%), and Class 6 was down $924 (or 5.7%). Compared to last April, Class 4 was down $909 (or 6.2%), Class 5 was down $853 (or 4.7%), and Class 6 was down a notable $4433 (or 22.4%). See graph for detail.
All classes were down substantially in volume vs. March. The biggest hit was in Class 6, with a 54.6% decrease month-over-month. However, this figure is compared to an unusually strong March. Tough month-over-month comparisons were true for Classes 4 and 5 as well. If March is taken out of the picture, April’s volume was comparable to other recent months.
With these vehicles exposed to (and participating in) a wide variety of economic segments, it is difficult to explain monthly changes in price. However, one possible explanatio ...
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The spring of 2013 is shaping up to be a hot one for sleeper tractors. April built on March’s record high retail pricing, to come in at $51,391, a $626 (or 1.2%) increase. Year-over-year, April 2013 was $1694 (or 3.3%) higher than April 2012. See graph below for detail.
Like last month, average mileage was slightly lower than the recent mean, at 529,183. This figure is 5171 (or 1.0%) higher than March, but 18,091 (or 3.3%) lower than last April. April’s average mileage is lower than the most recent two-quarter average by about 10,000, which would make a negligible to mild impact on average pricing.
It looks like the main factor behind the increased pricing is the larger number of newer sleeper tractors entering the retail market. The 2009 and 2010 model years have notably increased their representation in the past two quarters, and are bringing money in the mid $50’s (2009) to the mid-$60’s (2010). See graph below for detail.
With higher-mileage trucks increasingly directed to the ...
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As mentioned in our most recent Guidelines, the volume of trucks reported sold at auction has increased notably since 2013 began. We stated that this increase is likely due in part to a greater number of sleeper tractors with over 600,000 miles filtering through this channel. Further investigation suggests that medium duty trucks and vans are also a likely factor.
April was a particularly high-volume month, with 3716 trucks reported sold. This figure is the highest we’ve seen since August of 2010, and is 659, or 17.7%, higher than last April. Through the first four months of 2013, we show a total of 12,163 trucks reported sold. This figure is 1431, or 11.8%, higher than the same period last year.
Pricing on average has decreased moderately during this period. In the first four months of 2013, auction pricing averaged $13,059, which is $1411, or 9.8%, lower than same-period last year. Keep in mind that these averages are for the entire combined medium and heavy markets. More detailed analysis by ma ...
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Common wisdom among many people in the used truck business is that pre-DPF trucks will bring more money than DPF-equipped trucks, specs and mileage being equal. This means that the last of the pre-DPF trucks (2007 model year) should be worth more than the first of the DPF-equipped trucks (2008 model year). In other words, DPF overrides model year.
We tested this theory and, to be blunt, found it false. The graph below shows retail selling prices for MY2007 and MY2008 sleeper tractors broken down by mileage range, for trucks sold in the first 3 months of 2013. Data has been “cleaned” as much as possible to adjust for spec and model, so the impact of those factors should be minimal.
As you can see, 2008’s brought notably more money for every mileage band above 300K.The average premium for a MY2008 sleeper tractor was $5362.
One potential factor behind the difference in pricing is the notably higher volume of 2007’s sold. We show 596 MY2007 sleeper tractors reported sold during this period, as compared to 3 ...
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A recent Transport Topics article (subscription required) examined the issue of insurance underwriting for natural gas vehicles. Underwriters are finding it somewhat challenging to write coverage for these vehicles due to the lack of market experience.
NADA’s database of sold natural gas vehicles is essentially nonexistent. Even with the recent improvements in availability/choice and interest in natural gas vehicles, the segment remains miniscule. In addition, owners of NG equipment tend to hold on to these trucks longer than usual. As such, there have been almost no NG vehicles reported sold to NADA over the years.
Going forward, as is usually the case with new vehicles, there will be a bit of a chicken/egg scenario – sellers may have difficulty selling/financing the truck because there’s no NADA value for it… but there’s no NADA value for it because none have been reported sold. What usually happens is a few dealers will make a judgment call and establish the first few selling prices for the truck. Then, ...
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Retail sales data submitted by dealers and OEM’s to NADA shows that the average sleeper tractor sold in March for $50,765. This figure represents the highest average price we’ve seen since our current data collection processes were put into place more than five years ago. This record result is $1241 (or 2.4%) higher than February’s, and $2079 (or 4.1%) higher than last March.
Mileage was admittedly slightly lower than the recent average, at 524,012. This figure is 15,995 (or 3.0%) lower than February’s, and 18,069 (or 3.3%) lower than last March. However, the last time we saw mileage at this level – in October of 2011 – average pricing was $1401 lower. In the real world, a truck with 525K is not going to bring appreciably more money than a truck with 540K. We therefore consider the impact of mileage on March’s pricing to be negligible to mild.
As for age, March’s average was 77. This figure is right in line with recent months – 1 month newer than February, and 3 months older than last March. Age was therefo ...
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With the housing market in recovery and the fracking industry fully ramped up, it would be logical to start to look for a recovery in the Class 8 construction segment. The graph below shows combined retail and wholesale sales data for the most recent three model years for which we have a meaningful volume of data.
At this point, only the 2008 model year has enjoyed an uptick in pricing, with a nice increase starting in the 4th quarter of 2012. 2006 and 2007 trucks were flat in this period. Average mileage was not a major factor in month-to-month changes for any model year. Volume of trucks sold increased mildly in the 1st quarter.
Since the newest model year can function as a substitute for new trucks, an increase in pricing and sales volume is potentially encouraging. At the same time, we would need to see a sustained increase in pricing and volume for more model years before identifying a recovery. Fundamentally, residential construction alone is not going to move the bar substantially. Commerci ...
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March Wholesale data shows that Class 6 conventionals continued to appreciate through the first quarter of 2013. Class 5’s also saw an uptick in March, after holding steady for three months. Class 4’s saw a minor drop in March, putting that segment back to where it was in November of 2012.
In terms of volume, the first quarter of 2013 has seen substantially fewer Class 6 trucks sold than the fourth quarter of last year. This difference is most likely due to the timing of fleet trades– in essence, a supply-side rather than demand-side explanation. Class 5 saw a moderate uptick in volume in March after holding steady from November, 2012 to February, 2013. As such, March’s price increase for that segment looks even more solid. Class 4 saw a very substantial increase in March volume, which likely explains the decrease in pricing. We expect continued general upward movement in Class 4 in the short term.
We will continue to closely monitor all segments of the medium duty market and provide real-time updates.
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The graph below shows the result of organizing NADA’s CY 2012 retail sales data for sleeper tractors into region. The analysis is an attempt to show the relative difference in value placed on trucks sold in each region.
For reference, the average sleeper tractor retailed in the US in 2012 was a MY 2007 aerodynamic truck with a large raised-roof sleeper, just over 450HP, and a 10-speed manual transmission. That truck sold for $49,086 and had 547,881 miles.
We adjusted for mileage and model year differences between region, but there are a few factors to consider:
First, trucks sold in the CA and Desert Southwest regions were notably newer than those in other regions. In fact, there were no sleeper tractors older than MY 2005 reported sold from either region. This is most likely due to the stringent emissions requirements for trucks operating in that region. Our age adjustment came into play here, but this is still a factor to keep in mind.
Second, trucks sold in the Mountain region tended to have a hi ...
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Data reported to NADA from auctions and dealers indicates that February was the third month in a row to see a substantial increase in selling prices for Class 6 Conventionals. The Class 4 segment is also heading upwards, and Class 5’s remain stable. See graph for details.
After declining throughout most of 2012, Class 6 Conventionals saw a bump up of about $1800 in December, followed by a $1400 increase in January, and a whopping $3000 in February. December’s increase occurred in tandem with an increase in number of trucks sold, which we characterized as a market shift to the positive. Volume subsided quite a bit in January, with a drop of about 70%. That drop could partially explain January’s higher pricing, but February’s volume was nearly identical to January’s. As such, we remain optimistic that improved consumer spending and residential construction may be finally trickling down to the medium duty market.
Stay tuned for further analysis in the April edition of GuideLines, available early next week.
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