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J.D. Power: New truck deliveries ramp up, but demand expected to outpace supply into second quarter of 2019

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

Volume at auction remained low

The number of trucks sold at auction in August remained low and pricing was strong, indicating that supply continues to be tight. The volume of sleeper tractors sold by leading auction companies was virtually unchanged from July, dropping from 100 to 99.

The average auction price of 2014 model year trucks came in at $39,000, 13.9 percent lower than July. Prices for model years 2013 trucks dropped a mere 0.8 percent last month. Prices for model years 2012 and 2011 climbed 10.4 and 16 percent, respectively.

Year-over-year, J.D. Power reports trucks 4-6 years old brought in 21 percent more money over the first eight months of 2018 than during the same period last year.

“Production constraints seem to be mostly alleviated at the factories, so we expect new truck deliveries to increase going forward,” the report reads. “Trade-in volume will ramp up incrementally.”

J.D. Power Senior Analyst Chris Visser said carriers began to take delivery of considerably more new trucks in August.

Retail pricing was stable

J.D. Power continued to report stable pricing at retail in July, the most recent month with available data. Demand for late-model trucks continued to outpace supply, suggesting strength in the market.

The average class 8 truck retailed in July was 82 months old, had 462,125 miles and brought $53,196 according to the report. Compared to June, the average truck was one month newer but had 2.3 percent more miles and brought 2.8 percent more money.

Prices dropped 5.5 percent for model year 2016 trucks. Prices dropped 1.4 for model year 2015 trucks and rose 3.3 percent for model year 2014 trucks.

Year-over-year, J.D. Power reports late-model trucks brought in 6.1 percent more money over the first seven months of 2018 than during the same period last year.

“Looking at specific models, there was little competitive movement in July,” the report reads. “Individual trucks moved up and down with the overall market.” 

Sales per dealership held steady

Class 8 truck sales per dealership were similar to June, coming in at 4.8 trucks per rooftop.

J.D. Power does not expect these numbers to increase notably until the supply of trade increases.

Supply still expected to rise

Visser predicted the current new truck cycle will remain hot for the for at least two more quarters, with the record-breaking order rate reflecting more build slot reservations than legitimate need. However, deliveries are still below their predicted peak.

“The last time orders dramatically increased over a multi-month period was late 2014, with orders peaking at just under 46,000 units. In following months, actual deliveries increased to slightly over 25,000, then delivered rather quickly,” the report reads. “Today, orders have crested 52,000 units, but deliveries are struggling to hit 23,000. If we assume economic and regulatory factors have created a need for roughly 50 percent more trucks today versus 2014, actual need should be 37,500 units per month.”

Those calculations mean OEMs still have a significant amount of headroom before they begin meeting demand.

J.D. Power is forecasting more new truck deliveries in the coming months, but demand is still expected to outpace supply into the second quarter of 2019.

Ashley Coker Prince

Ashley is interested in everything that moves, especially trucks and planes. She works with clients to develop sponsored content that tells a story. She worked as reporter and editor at FreightWaves before taking on her current role as Senior Content Marketing Writer. Ashley spends her free time at the dog park with her beagle, Ruth, or scouring the internet for last minute flight deals.