Construction activity is still essentially flat lined, but consumers have been spending more on residential improvements. Since the 1-Ton cab & chassis market is heavily exposed to these sectors, how has the segment performed over the past two years?

I would like to start off first with a clarification. The term “1-Ton” really has no connection to actual payload or hauling capability of a modern truck. The typical 1-Ton truck of today can carry at least 2 tons, even with single rear wheels. And since we’re looking solely at cab & chassis models, the term has even less meaning. To be clear, then, this study includes cab & chassis versions of the Chevy/GMC 3500, Ford F350, Dodge/Ram 3500, and Hino 145. Figures include both gas- and diesel- powered trucks. We will look strictly at wholesale data, since the vast majority of our sales data for this segment is comprised of auction results.

Looking at the graphs below, the most obvious trend is the shift in average age and price that occurred in the 3rd quarter of 2010. Age dropped considerably – from an average of 7.9 years in the first half to an average of 7.0 years in the second half. This shift drove up the average selling price from $8454 to $9761 during that period.

Interestingly, average mileage did not drop in conjunction with average age. This suggests that most of the excess fleet inventory that had sat idle during the worst of the Great Recession worked itself through the market in the first half of 2010.

Pricing has been essentially flat for almost two full years now. The minor uptick in early 2012 is explained by the slightly lower age and mileage of that group, and probably doesn’t point to increased demand. On the bright side, we don’t expect any downward movement, since consumer spending and the economy overall are clearly improving. On the other hand, given the ample inventory of these trucks, we expect near-term upward price movement to be modest. Major movement won’t occur until residential improvement activity accelerates and general construction starts to increase.