Editor’s Note: Updates with new 3rd and 4th paragraphs with FTR Transportation Intelligence material.
Demand for new Class 8 trucks continued at an elevated rate in March even though many of the 40,000 bookings have little chance of being filled until 2022 because of a growing backlog and supply chain shortages.
Compared to a year ago when the first wave of COVID was shutting down manufacturing around the world, orders were up 422%. (That is not a typo.) They were down 10% compared to February, according to ACT Research.
FTR Transportation intelligence on Monday reported 40,800 orders, a record sixth consecutive month of at least 40,000 bookings. FTR reported 372,000 orders for the trailing 12 months.
“The pressure in the market is building as orders continue to flow into [manufacturers] at a record pace,” said Don Ake, FTR vice president of commercial vehicles. “It appears the industry will be playing catch-up well into the first half of next year.”
Orders for Class 5-7 medium-duty trucks rose 19% over February. Demand was more than double that of March 2020, up 103%.
“Despite retrenching from February, Class 8 demand remained strong in March, well above replacement and even anticipated economic growth, let alone the industry’s ability to keep pace in the current supply chain constrained environment,” ACT Vice President Steve Tam said in a news release Friday.
Truck makers scramble to keep building
Truck makers are scrambling to keep building as semiconductor chipsets, as many as 17 per truck, are in short supply. Daimler Trucks North America is taking rolling downtime at two medium-duty plants in North Carolina and Mexico. Volvo Trucks North America expects to take down days this quarter.
PACCAR Inc. is building trucks without the missing chips and parking them at its Kenworth, and Peterbilt plants in North America and its DAF Trucks plants in Europe and Brazil. The trucks are reinserted on production lines as chips become available. The 3,000 units lost in the first quarter will be added in the second quarter or later.
“With orders remaining hot through February reporting from ACT, backlogs and backlog-to-build ratios continuing to rise, and new vehicle inventories tight, the problem isn’t demand, but supply,” said Kenny Vieth, ACT’s president and senior analyst.
The $1.9 trillion federal stimulus package is further juicing strong demand for consumer goods and trucks to move them. The economy stands to get a major boost from President Joe Biden’s $2 trillion infrastructure bill, if it passes the Democratic-majority Congress over Republican objections.
Medium-duty trucks orders are also robust.
“This is particularly interesting, given the medium duty’s second-fiddle position in the supply chain pecking order,” Tam said.