December North American Class 8 Orders Stable

Class 8 orders were up 14% from November, but were down 6.5% compared to December 2018.

Ftr December2019 Class8 Orders

FTR reports preliminary North American Class 8 orders for December 2019 remained stable at 20,000 units. Fleets are being very cautious in this environment, only ordering what they know they need for the next few months. Orders averaged just under 20,000 units a month for the fourth quarter, basically right at replacement demand. Order rates are expected to stay in this range for the next few months.   

Although the December order activity improved 14% month-over-month (m/m), the total was still below the less-than-robust results seen during October and down 7% y/y. Orders were down 6.5% however from December 2018. 

Class 8 orders for the past 12 months have now totaled 179,000 units.

Don Ake, Vice President Commercial Vehicles, comments, “This is as balanced and stable as you are going to see in Class 8 ordering. Fleets are ordering trucks according to their standard replacement cycles and also for normal delivery cycles. They are not speculating about the future direction of the freight market because there is too much uncertainty. This is a 'wait and see' approach.

“The freight market is strong, but growth has stalled. The good fleets are making money, the weak fleets are leaving the industry. It is a rebalancing environment. Fleets have the funds to replace old units and with a growing economy, they have the confidence to do so. However, the equipment market is in a holding pattern due to economic and political factors. The political uncertainty will only intensify up to the election.” 

“Overbuying through 2019 and insufficient freight to absorb the ensuing capacity overhang continued to weigh on the front end of the Class 8 demand cycle in December,” adds Kenny Vieth, ACT Research’s President and Senior Analyst. He continues, “Recalling July and August, orders were down 80% from the corresponding months in 2018. December’s orders brought the full-year 2019 volume to 181,000 units versus 490,100 units in 2018.”

Vieth concludes, “For all of Q4, Class 8 orders were booked at a slightly above the 2019 trend 195,600-unit SAAR.”