From the category archives: Market Analysis and Forecasts

Market Analysis and Forecasts

Preliminary April Market Results

As predicted, it looks like all critical market measures – price, mileage, and sales volume – were up for April.

With about 95% of our individual dealer sales reports in, sales volume is running about 7% behind March’s total. March, as you might remember, saw a 25% increase from February.

It should come as no surprise that average selling price and mileage both look to have increased as well. The sleeper market overall (all trucks under 1M miles) is currently running more than $1100 ahead of March, despite a 10,000 increase in average mileage!

The 4-year-old sleeper tractor benchmark increased less dramatically – about $400 – but average mileage was way up to 437,000 from 412,000.

Bottom line – more trucks are being sold for higher prices despite higher average mileage.

The Fuel Price Roller Coaster

As reported in Transport Topics: “The Department of Energy lowered its projected diesel average for this year by 9 cents, to $3.89 a gallon, and by 14 cents next year, to $3.93. The projected decline follows two big boosts — an 18-cent hike in its forecast last month to nearly $4 a gallon, and a 38-cent increase the month before that.” Right now, diesel and gas are running much higher than the price of crude would suggest. Until last week, gas and diesel futures had been propped up mainly by fears that Mississippi River flooding would impact supply. Energy companies now say supply fears are unfounded, and there is enough capacity in the system to make up for any production slowdowns in selected factories. The price of refined products traditionally lags the price of crude by a notable margin on a decline, so let’s assume diesel and gas will edge closer to their traditional relationship with the price of crude over the next few weeks. Which brings us to the crux of the matter. No one really has a firm handl ...

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Industrial Production and You

Since the end of 2009, the trucking industry recovery has been driven primarily by industrial production. What exactly does this mean? It means that the popular concept of what drives the trucking industry – consumers purchasing goods – is only part of the story. Industrial production refers to the output of America’s manufacturing base. Specifically, we’re talking mainly about raw materials (steel, mining, lumber), components and finished assemblies (including machinery and vehicles), the telecom industry, and the food processing industry. As such, manufacturing’s “customers” are a few steps removed from end consumers. Basically, an increase in industrial production today means planners see more need for their products tomorrow, which means trucking (and rail and sea and air) will have more freight to move. This is one reason why short-term swings in consumer spending don’t correlate directly to swings in freight volumes. And it’s why the recovery hasn’t depended solely on trucking’s traditional role of tr ...

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1Q 2011 was a Record Breaker for Selling Prices

The average, mileage-corrected retail selling price of four-year-old (2008MY) sleeper tractors from January-March of 2011 was $65,675. Last year’s same period result was $47,873. This is almost a 40% increase.

Not only that, but the sleeper market overall is finally beating the CY2008 average.

Yahtzee!

Used Truck Market Predictions

With the second quarter half over, it’s a good time to review the factors that will influence the used truck market going forward. A “+” indicates a factor that supports higher used truck prices, and a “-“ indicates a factor that supports lower prices. (+) Many buyers still prefer used trucks over new due to the higher price and new (to North America) technology of “2010 emissions” trucks. (+) Model years 2008-2011 were built in historically low numbers, which means there will always be comparatively few of these trucks available in the secondary market. (+) The 2007 model year is in high demand since it is the last of the “pre-2007 emissions” models available. (+) Some fleets are selling their used trucks direct to customers, keeping these units out of the traditional secondary market. (+) Most fleets are on trade-in schedules of 3-6 years. This means we won’t see higher-volume 2012MY trucks in the used market until 2014 at the earliest. (+) A new round of emissi ...

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Have Used Truck Inventories Started to Rise?

It looks like March will be a strong month for retail used truck sales volume. Sales reports from individual dealers (excluding OEM’s and large national chains) currently reflect a 22% increase in number of used trucks sold compared to February.

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