July Class 8 Truck Orders on Par with Previous Month

Preliminary North American Class 8 truck orders in July 2021 were similar to those in June. 

FTR reports July net orders were down 1% on a month-over-month (m/m) basis, reaching a total of 26,500 units. It says orders were up 25% year-over-year (y/y) and that orders total 394,000 units over the past 12 months. 

ACT Research puts July orders at 25,800 units, which is comparable to the 25,809 orders booked in June 2021. Net orders for Classes 5-7 rose 30% from June and 70% from 2020, reaching a total of 30,200 units. 

According to FTR, the trucking industry is in a holding pattern at the bottom of the current order cycle. Most OEMs have begun taking 2022 orders, though there is some delay because of ongoing cost uncertainties and supply chain issues. 

“July ordering was similar to June in that OEMs took a limited number of orders for delivery in 2022. Fleets need a significant number of new trucks right now and they perceive this need will continue throughout next year. However, OEMs are having difficulty establishing reasonable 2022 pricing, with commodity and other costs elevated. It is uncertain if current higher production costs are transitory or will persist into 2022,” said Don Ake, Vice President of Commercial Vehicles for FTR, in the research firm's press release announcing its July order rates.

“Also complicating the situation is that shortages of semiconductors have limited Class 8 production. It is estimated that supply of trucks is falling approximately 25% behind market demand. We are running out of time for OEMs to catch up. Most of the unproduced orders will roll into the first quarter of 2022. If those months are already booked solid, it creates even more headaches for the industry. Things won’t approach any degree of normalcy for months. Until semiconductors begin flowing into the OEMs in sufficient [quantities], we will be playing catch up.” FTR

“In 2018, there was an explosion of orders across the industry, as dealers raced to get their places in rapidly growing out-year backlog queues. Underlying drivers of commercial vehicle demand are considerably hotter than they were three summers back, with 6-plus percent GDP growth, capacity constraints across multiple shipping modes, at/near-record trucking freight rates, surging carrier profits and record used equipment valuations providing deep support for Class 8 demand,” said Kenny Vieth, ACT’s President and Senior Analyst, in the firm's press release announcing its July figures. “While conditions are in place to sell-out 2022 backlogs in a very short time horizon, the industry appears to be approaching order distribution much differently this year. That being said, while order rates remain below the backlog-filling volumes of Q4 and Q1, the 3- and 6-month seasonally-adjusted annualized rates remain well above the industry’s ability to produce.”

Regarding the medium-duty market, Vieth commented, “With the consumer economy remaining buoyant, July’s Classes 5-7 net orders accelerated on both an actual and seasonally adjusted basis. July’s medium-duty net orders fell just short of a top-five all-time finish, coming in at a respectable sixth best ever.”

Vieth concluded, “North America Classes 5-8 orders in July continued in rangebound fashion, falling in the middle of order activity since April: Preliminary inputs indicate net orders in July were 56,000 units, compared to a lower-bound 48,900 in May and an upper-bound 62,300 in April. While this July’s volume is middling compared to the order standards set over the past year, it handily beats last July’s COVID-impacted volume at +47%.”

Final order data from both research firms will be available in mid-August.