Marketplace Change Since Recession

In case there was any question about how the marketplace mix of trucks has changed since the recession ended, here’s a look at age and mileage of sleeper tractors reported sold (retail). Bottom line – trucks available in the marketplace are older, with higher mileage. Despite this, as mentioned in the latest Guidelines, the average selling price of these trucks hasn’t changed appreciably since February. Buyers continue to pay elevated prices for older, higher-mileage trucks.

Stay tuned for an update including June data.

Another Mixed Month for Industry

June’s Industrial Production figures again provide mixed messages on the progress of the economic recovery. IP overall was essentially unchanged from May with a 0.2% increase. On the Manufacturing side, overall there was no change from May. The important automobile segment recorded a 2.0% decrease, mainly due to continued component shortages from Japan. Increased days’ supply of certain models and early seasonal slowdowns may also have played a role. This drop builds on last month’s revised 1.5% decrease for that sector. If we exclude auto manufacturing, the data shows a 0.2% increase, suggesting auto production had a larger impact on Manufacturing this month. Most consumer-oriented segments such as furniture and electronics were down between 0-2%, while industry-oriented segments such as primary and fabricated metals rose enough to compensate for these decreases. The main takeaway here is the Japan disaster continues to affect Manufacturing, with consumer confidence potentially playing a growin ...

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June Sales Volume Looks Healthier than May

It looks like May might have been an anomaly as far as sales volume goes. Focusing on number of sales reported by individual dealerships (excluding OEM and other data), May volume was down over 20% vs. April. Now, with about 85% of June data received from the dealer segment, we’re already seeing volume just about equal to all of May. The number of dealers reporting to us doesn’t change appreciably from month to month, and, in any case, we can look at the number of sales per dealership to compensate for any minor change there. We are noting a few more multiple-unit package sales reported in June, which is obviously making a difference. But those deals aren’t responsible for the entire increase. Perhaps we are seeing a few more trade-ins hitting the secondary market, despite the contrary factors mentioned in this month’s Guidelines. Demand is still there, and sales volume will fluctuate depending on number of available trucks. In general, we should be prepared for more volatility in this supply-constraine ...

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ATD/NADA Official Commercial Truck Guide® Update

The second quarter is proving to be more opaque than the first. After an uptick early in the year, average retail selling prices for the highway sleeper tractor market have been essentially flat since February. The benchmark four-year-old sleeper tractor unexpectedly declined from April to May. Retail sales per dealership saw a steep decline for May, although volume from OEM’s was similar to last month. To read more, download the full version here.

May Sales Data Shakes Things Up

There is a lot of volatility in May’s data. The benchmark four-year-old sleeper tractor took a dive from April, although the sleeper market overall remains steady. The number of sales reported from individual dealerships was down as well.

Look for a full analysis of these developments in the July edition of Guidelines, which will be available early next week. In the meantime, here are a couple of graphs that illustrate what we’re seeing.



Medium Duty Market Update

As we finalize our June wholesale data, here’s a look at average selling prices for popular segments of the medium duty market from the auction and dealer wholesale channels through May.

No real news to report here. Basically, medium duty selling prices have bounced along the bottom since the downturn began. There was no real improvement in late 2009 like there was with Class 8 highway tractors. The housing market, construction, and consumer spending will need to improve further before I would expect to see much upward movement in this side of the market.

Data in the graph has been adjusted for mileage and age. Those averages are as follows:

Class 3 Conventional:  102,543 mi., 92 months

Class 3-4 Cabover:  118,783 mi., 95 months

Class 6 Conventional:  175,065 mi., 107 months

May Truck Tonnage

The ATA Truck Tonnage Index dropped a bit more than anticipated for May, down 2.3% vs. April.

With Manufacturing output up 0.4% (up 0.6% excluding the auto sector), consumer-oriented durable goods up just under 2%, and most other components of Industrial Production essentially flat, I would have expected a Tonnage result comparable to April’s.

2.3% is not a great drop, at least not enough to suggest any appreciable change in demand for new and used trucks. Plus, the Index is based on a survey, so we must make some mental allowances for variations in responses.

I am considering this month’s result an example of the minor fluctuations we should expect to see as the economy continues to sputter its way towards recovery. With the auto industry ramping back up in the short term, plus gas prices set to head further downwards, the fundamentals still support a healthy freight environment.
 

Preliminary May Sales Data

With about 85% of our individual dealer sales reports in, it looks like there was a drop in sales volume for May from this segment. We still have yet to hear from a few of our larger-volume dealers, so I’m hesitant to provide an estimate – but look for May to unwind much of the volume gains made in the preceding months.

Other sources were comparable to April in terms of volume, so this phenomenon appears limited to the dealer segment for the time being.

Happily, pricing in general does not appear to have changed appreciably, with retail selling prices looking comparable to April. The newest model years (2008 and newer) may be slowing their appreciation curve as more of these trucks enter the secondary market, but supply is still inadequate to meet demand.

For now, then, this development appears to be limited to volume. Look for final analysis in our July Guidelines, which will be out the second week of the month.
 

'Successful Dealer' Highlights the Used Truck Market

The June 23rd edition of Successful Dealer talks about the used truck market. The article states that we are in a “seller’s market,” which I doubt anyone involved in the used truck industry would disagree with. The article also raised an important point about financing – some lenders are still having a hard time recognizing that used truck prices have risen as much as they have in the past year and a half. As we stated in the May edition of Guidelines, four-year-old trucks brought almost 40% more money in 1Q 2011 than they did in 1Q 2010.

Also, as I mentioned in a previous blog, some lenders may be using only our base values and excluding options/accessories and mileage. While any business is entitled to use our values as they see fit, a complete NADA valuation includes all adjustments.

As always, I’m here to clarify any of these issues. Just send an e-mail to cvisser@nada.org.

No Gloom & Doom Yet on the Industrial Side

As we predicted, US Industrial Production stayed essentially flat for the second month in a row, rising 0.1% over April. Despite continued impact of the Japan disaster on the auto industry, the manufacturing sector was up 0.4% over April. It appears that vehicle manufacturing had less of an impact in May, as manufacturing was up 0.6% if you exclude auto production. Another trucking-focused piece of the puzzle, consumer goods, was down a negligible 0.1% in May. The minor drop in durable goods for April was basically canceled out in May. Home electronics were up 1.7%, appliances, furniture, and carpeting was up 1.8%, and miscellaneous durables was up 0.7% Bottom line? The growth of the industrial economy has slowed in the past two months, but the data isn’t yet showing much reason for concern. As the auto industry ramps back up in the next few months, look for a more meaningful uptick in the manufacturing sector. And barring any unlikely increase in gas prices, consumers should keep the durables ...

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