In the middle of the second quarter, most segments of the medium duty market are showing stable to higher pricing along with higher volume. We see most segments as trending in a net-positive direction.

Starting with Class 3 and 4 cabovers, that segment outperformed 2015 in the first quarter, with pricing moderately higher despite substantially higher volume. Our benchmark group of 4-7 year-old units brought an average of $17,982 in the first quarter, which is $893 (or 4.9%) higher than the same period of 2015. Lower average mileage is partly responsible for the difference, but market conditions are incrementally better for this segment. See graph below for detail.

Class 4 conventionals narrowed the year-over-year price deficit in the first quarter, with our benchmark group of 4-7 year-old trucks coming in at an average of $19,406. This figure is only $227 (or 1.2%) lower than the first quarter of 2015. Mileage and volume were both moderately higher in 2016, which points to an improving market.

4-7 year-old Class 6 conventionals were essentially equal in the year-over-year comparison, with the first quarter averaging $23,351. This figure is only $150 (or 0.6%) off 2015’s same-period average. Average mileage is notably lower in 2016, at an average of 137,590 – 39,810 (or 19.7%) than the first quarter of 2015. However, volume has been higher in 2016. We consider this market stable, with no clear upward or downward pressure. See graph below for detail.

Stable to higher pricing despite higher volume is evidence of positive market conditions. Fleet returns could potentially cause a temporary dip in selling prices for certain segments, but that supply should cycle through relatively efficiently. Conditions overall could pull back as we get closer to the uncertainty of the upcoming Presidential election. Until then, there are few other factors limiting growth in medium duty segments.