Since early 2011, 2007 model year sleeper tractors have been showing up in our retail data in proportionally greater numbers. The graph below illustrates the increasing volume of 2007 sleepers reported sold. Note that the March figures are “in-process,” and represent about 85% of what we ultimately expect to collect by the end of the month.


 

This outsized 2007 performance is actually fairly easy to explain. First, 2007 was the pre-buy model year prior to the introduction of the “2007” (2008 model year) emissions standards. In addition, the 2007 calendar year marked the start of the Great Recession, which would depress truck production for four years. The new truck build numbers tell the story:

2007 model year (pre-buy):   378,000
2008 model year (start of recession):  212,000
2009 model year:    205,000
2010 model year:    118,000

Based on these build figures, it is logical that the 2007 model year will be present in the marketplace in proportionally greater numbers.

The other major factor is fleet trade cycles. If we assume the majority of new truck buyers keep their truck for anywhere from 3-6 years, it is logical that the 2006 model year would hit the marketplace in greatest volume starting in the 2008 calendar year, and decline in 2011 (remember that model years generally begin in January of the preceding calendar year). That trend is evident in the graph. As for the 2007 model year, we would expect to see trades start to increase in 2009, and decline in 2012.

So has the increased volume of 2007’s affected their selling price? The short answer is yes, but to a degree proportional to their increased mileage over time. As the graph below illustrates, average mileage for 2007’s increased by about 100K in the past 14 months, while price decreased by about $6000. This price decrease is in line with what we would expect given the increased mileage and additional year of age.



The bottom line is the 2007 model year will continue to have an outsized impact on market dynamics for at least the next 12 months.