ACT Research Co.

[November State of the Industry: NA Classes 5-8 Update] - October Class 8 Orders Suggest Vocational Market Queueing Ahead of Regs Final North American Class 8 net orders totaled 30.6k units in October, with ongoing strength in the vocational market. Read more from the update here: https://hubs.la/Q02Z2ldW0

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U.S Trailer Preliminary Update ?? Preliminary net trailer orders rose about 4,800 units from September to October, but at 16,900 units, were lower compared to last October, down 52% y/y. Seasonal adjustment (SA) at this point in the annual order cycle lowers October’s tally to 12,300 units, but that’s about 16% above September’s seasonally adjusted intake. Final October results will be available later this month. This preliminary market estimate is typically within ±5% of the final order tally. “Since we’re still in the early stages of the traditional start to the order season, this month’s uptick was expected. It’s also no surprise that the data is significantly below the October 2023 intake, given the soft demand recorded throughout this year,” said Jennifer McNealy, Director CV Market Research & Publications at ACT Research. She added, “October’s data bring ytd 2024 US trailer net orders to 118,300 units, a 37.5% contraction when compared to the first ten months of 2023.” She cautioned, “Despite the sequential order improvement, October data continue to bear witness to our expectations of weaker trailer demand relative to recent performance, as continuing weak for-hire truck market fundamentals, low used equipment valuations, and already-filled dealer inventories impede stronger activity, especially into early 2025. An order uptick showcasing demand, or the lack thereof, depends not just on the first two months of the new order cycle, but at least on order volumes through January 2025.” McNealy added, “Industry anecdotes suggest that the lack of optimism continues, based on lower backlogs than we’ve seen in a decade. Despite positive momentum in the US economy, lingering weak carrier profitability suggests little support for trailer orders heading into 2025.”

[November State of the Industry: U.S. Trailers Preliminary Update] - Preliminary Net Trailer Orders Improved Sequentially, As Expected Preliminary net trailer orders rose about 4,800 units from September to October, but at 16,900 units, were lower compared to last October, down 52% y/y. Seasonal adjustment (SA) at this point in the annual order cycle lowers October’s tally to 12,300 units, but that’s about 16% above September’s seasonally adjusted intake. Final October results will be available later this month. This preliminary market estimate is typically within ±5% of the final order tally. Read more from the preliminary update here: https://hubs.la/Q02YqHCC0

[November Classes 3-8 Used Truck Preliminary Update] - Used Truck Market Results Mixed in October October preliminary Class 8 same dealer used truck retail sales volumes increased 29% m/m, according to the latest preliminary release of the State of the Industry: U.S. Classes 3-8 Used Trucks published by ACT Research. “Following the September preliminary release’s high-side surprise (+11%), final Class 8 same dealer used truck retail sales volumes declined 6.2%. We advised that the variation in participants could and did lead to different results,” according to Steve Tam, Vice President at ACT Research. “October Class 8 same dealer used truck retail sales volume growth appears to be shaping up for a similar scenario. Seasonality called for a decrease of about 3% m/m.” Read more from the preliminary update here: https://hubs.la/Q02YffYw0

N.A. CV OUTLOOK Update With well supported end markets and technology forcing regulations on the horizon, vocational truck buyers not only have a willingness to get a head start on refreshing their fleets, but clearly, the ability as well. “While we always caution that one month does not make a trend, September’s orders suggest queuing for the limited build slots between now and the beginning of 2027 has begun. With tractor demand suspect, vocational truck production should continue to surge into 2025,” according to Ken Vieth, ACT’s President and Senior Analyst. He added, “We have discussed ad nauseum this year the bifurcated Class 8 market. On the flip-side, US and Canadian tractor markets remain awash in capacity due to ongoing tractor retail sales strength in 2024 holding freight rates to only incremental gains cycle-to-date. After a 10-quarter elevator ride down, carrier profitability rebounded modestly in Q3, as the economy continued to generate good freight volumes and capacity continued to slowly exit the market. With the expectation that tractor sales will slow in early 2025, one of the missing pieces of the recovery-to-date, capacity rationalization, will finally fall into place.” “Even as we more fully recognize the depth of the macro-economic support lifting heavy vocational equipment demand, the tractor market remains under pressure,” Vieth concluded.

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[November N.A. CV OUTLOOK Update] - With well supported end markets and technology forcing regulations on the horizon, vocational truck buyers not only have a willingness to get a head start on refreshing their fleets, but clearly, the ability as well. “While we always caution that one month does not make a trend, September’s orders suggest queuing for the limited build slots between now and the beginning of 2027 has begun. With tractor demand suspect, vocational truck production should continue to surge into 2025,” according to Ken Vieth, ACT’s President and Senior Analyst. Read more from the update here: https://hubs.la/Q02Y2GgM0