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Work Truck Industry Forecast Remains Positive

May 27, 2014

The current work truck industry forecast remains positive through 2014 and into 2015. While sales of commercial (box-off) truck chassis fell a bit in February, this slight decline should not be viewed as a change in the current upward trend, as sales tend to be lower in February than they are in December and January. (This regular dip in sales each year is generally attributed to inventory, tax and planning cycle reasons — but this year, bad weather was also a contributing factor.)

More importantly, sales of conventional cab-type truck chassis have been
steadily rising since the second quarter of 2013, reinforcing the positive forecast for the rest of 2014.

In total, U.S./Mexico truck chassis sales fell 4.1 percent as compared to February 2013, and Canadian sales decreased 1.3 percent. Shipments data was much more interesting than sales data in February 2014, with shipments of conventional cab-type truck chassis increasing at a rate of 8.3 percent.

During this month, shipments were roughly 2,000 units higher than sales, indicating that chassis availability may be improving.

After trending down for two years, it would be somewhat unrealistic to think that the OEMs’ expectations of Class 2 commercial truck chassis sales reversed in February. While that assumption may still prove to be accurate in this specific market segment, the 18-month cumulative difference between shipments and sales may continue to drop through the second and third quarters before registering a true change in trend. Small commercial vans are strongly impacting this market, and the forces of supply and demand are still influencing adjustments in the market for Class 2 box-offs.

Throughout the NAFTA market for commercial truck chassis, Class 3 has dominated changes in the totals of the Class 3–5 segment over the past two years and is expected to do so for a third consecutive year. Class 5 sales have also grown in the last two years but, in the first two months of 2014, are increasing at less than half the growth rate registered in Class 3. Class 4 sales, which registered a growth rate of -43.7 percent, have been the mirror image of Class 3 sales growth. However, to understand the OEMs’ expectations regarding sales in this market segment, note that the growth rate of Class 4 sales improved in each quarter of 2013.

As such, Class 4’s slow start in 2014 is probably not the reason the 18-month cumulative inventory in the Class 3–5 market segment dipped between October and January. It is more likely that the OEMs in this market had high expectations for Class 3 sales, but not quite high enough. It may also be the case that sales are simply growing too fast for production to keep up.

(SOURCE: NTEA OEM Monthly Chassis Statistics Survey)
(SOURCE: NTEA OEM Monthly Chassis Statistics Survey)
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