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Analysts Say Class 8 Downturn Likely to Continue

February 14, 2007

New York transportation equipment market experts at Bear Stearns say heavy truck orders during 2006 were "astonishing" considering weakening truck fundamentals and falling freight tonnage in North America, according to Today’s Trucking. That means the pre-buy phenomenon of 2006 was a far bigger driver of truck sales than actual market conditions demanded, says the consulting firm, making the commercial vehicle downturn for 2007 deeper and longer than the market expects. Retail sales of class 8 heavy-duty trucks topped out at 285,000 in 2006, a 12.3 percent increase over the 250,000 sold in 2005. Many truck OEMs and industry suppliers are predicting a 30 to 35 percent drop in 2007, Today’s Trucking reports. Preliminary January numbers show net new orders were the lowest since November 2002, and the largest year-over-year decline on record. The 11,000 units ordered (down 75 percent from Jan. 2006) are even lower than the firm’s predictions. Bear Stearns says January class 5 - 7 orders are down 46 percent over last year at 14,100, in line with estimates.
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