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Class 8 auction and retail market conditions point to maturing boom cycle

Ashley Coker

(Photo: Jim Allen/FreightWaves)


Some highlights from this month’s J.D. Power Commercial Truck Guidelines industry update:

Class 8 auction market showed little change

The number of trucks sold at auction decreased mildly in December 2018, and pricing also came in somewhat lower across most models. There appeared to be less tolerance for slightly high mileage, according to the report.

The average auction price of model year 2015 trucks came in at $43,550, 4.3% lower than November. The average auction price of 2014 model year trucks came in at $32,000, 2.3% lower than November. Prices for model year 2013 and 2012 trucks dropped 4.4% and 1.4% last month, respectively.

The only trucks to see rising average prices at auction in December were model year 2011 trucks, which climbed 5.9% to $21, 850.

“Strong pricing through the third quarter of 2018 left the year with essentially no monthly depreciation,” the report reads. “Market dynamics are pointing to somewhat less-hot conditions as 2019 unfolds.”

Year-over-year, J.D. Power reports trucks 4-6 years old brought in 21.5% more money over all 12 months of 2018 than during 2017.

The report states that Class 8 auction and retail channels closed out the year as expected, and conditions are pointing to a maturing boom cycle.

Retail sector held steady

J.D. Power reported average pricing at retail held steady in December, with average and lower mileage trucks bringing in strong money. Depreciation was minimal, though late model trucks with higher mileage did show some weakness.

The average Class 8 truck retailed in December was 69 months old, had 459,967 miles and brought $57,235 according to the report. Compared to November, the average truck was identical in age but had 1% fewer miles and brought 0.7% less money.

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Year-over-year, the average sleeper sold at retail was four months newer, had 6.5% more miles and brought 20.9% more money.

Prices dropped 9.6%for model year 2016 trucks, however prices rose 0.9% for model year 2015 trucks and 10.7% for model year 2014 trucks.

The report attributed the price drop for model year 2016 trucks to a large group of identically-equipped trucks being sold at bulk price.

Year-over-year, J.D. Power reports late-model trucks brought in 10.7% percent more money during the full 12 months of 2018 than during 2017. Depreciation averaged  0.3% in 2018, compared to 1.6% last year.

Sales per dealership dropped off

After coming in lower than expected in October, truck sales per dealership continued to come in substantially lower than anticipated in both November and December.

Sales dropped almost a full point to 4.1 in November before climbing to a meager 4.5 in December, according to the J.D. Power report.

Expect supply to begin outpacing demand

Class 8 truck orders dropped dramatically in both November and December, with orders dropping below deliveries in December, according to the report.

“The industry appears to be coming down the far side of the plateau, as the ‘beat-the-tariffs’ business inventory buildup is behind us and 2018 tax breaks become simply the new cost of doing business,” the report reads. “Deliveries of new trucks will remain strong into the second half of 2019, but it looks like demand is on the downward slope as supply heads in the other direction.”

The next J.D. Power update is expected to be released mid-February.

Chris Henry

Chris Henry has spent his entire 20-year career in transportation. In 2014, he founded the online motor carrier benchmarking service StakUp. As a result of a partnership with the Truckload Carriers Association (TCA) in 2015, StakUp was rebranded as inGauge and Henry became the program manager for the TCA Profitability Program (TPP), an exclusive benchmarking initiative that includes more than 230 motor carrier participants throughout North America. Since joining the program, participation in TPP has grown over 300%. In June 2019, StakUp was acquired by FreightWaves and Henry became its vice president of carrier profitability, in addition to his role with TPP. Henry earned an MBA from the University of Massachusetts and a bachelor of commerce degree from Nipissing University.