INDIANAPOLIS, Ind. – Stoops Freightliner and its network of truck and trailer dealers isn’t sensing that the drop in new equipment orders is anything to lose sleep over.
Instead, Brian McCoy, president of Stoops, said the current environment marks a return to more normal levels and lets the dealer better serve its customers’ needs. He provided a dealer outlook on the current truck and trailer market at FTR’s Transportation Conference Sept. 12. He said retail sales remain strong, and year-to-date are up 23%. Used truck sales are down about 20% but there remains strong interest in new iron.
“We have not slowed down in sales, and we don’t necessarily expect to in the next couple of months,” McCoy said.
Mark Hall, general manager of Stoops’ trailer business, said trailer sales year-to-date are on forecast.
“Overall, the unit count is right on what we forecasted for this year,” he said. “I think we will continue to see a strong remainder of this year, as we have a lot more build-to-order equipment in our pipeline. We haven’t seen any types of cancellations or any of the big fleets having any nervousness right now.”
But both McCoy and Hall admitted quoting activity has slowed. McCoy isn’t worried, however, since quotes for 2020 deliveries don’t usually pick up until October. On the trailer side, Hall attributed a slowdown in quoting activity to a still-lengthy backlog.
Because Class 8 trucks were in such high demand in 2018, many smaller fleets missed out on their buying cycles as they scrambled to secure credit, McCoy said. A slowdown gives them an opportunity to get their orders filled.
“We are getting back to those smaller and mid-sized fleets, trying to be more consultative with them and helping them through that buying process,” he said.
McCoy and Hall said tariffs on imports aren’t yet being reflected in purchase prices. McCoy said there was some upward pressure on truck prices last year, due more to the strong demand.
“At this point, truck prices have been more impacted by demand than anything else,” he said. “We are looking at probably a normal model year increase for next year.”
He is not anticipating a big impact from tariffs, especially in a slowing market.
“The manufacturers want to keep their lines moving and they will have more incentive to keep the lines moving as opposed to when they were completely filled,” he said.
Hall said trailer prices have risen over the past year, but have stabilized lately. “Every indication is the rest of this year should be relatively flat,” he predicted.
Asked to predict truck sales for 2020, McCoy noted sales in 2019 are up 23% and could be up as much as 40% had he been able to secure the units. He sees 2020 returning to somewhere between 2018 and 2019 levels.
“I think we will sell probably 90% of the trucks we sold in this calendar year, next calendar year,” he projected. “Freight is definitely slowing down, but our customers who have contracted business are still busy and doing well. The nervousness in the market is maybe from people who rely more on brokered business who don’t have contracts with customers.”
Stoops has been unable to secure enough stock truck build slots, and any deliveries that go unclaimed are quickly sold, McCoy said. Across 24 dealerships, the company had only 15 trucks for sale in June.
“There’s immediate demand,” McCoy said. “The questionable demand is in 2020 and moving forward. The rest of this year there’s going to be demand for trucks.”
McCoy said demand for new trucks has been so high, it was impossible to order stock trucks as recently as three months ago.
“Probably about 90% of our orders are sold orders and 10% are stock right now,” he said, adding the stock trucks are mostly vocational models to keep on-site for customers who need a specialized truck right away.
The record-high demand has placed challenges on the dealership, and has even cost it some business.
“On the truck side, we lost 800 truck orders we had in-hand that we could’ve filled if our manufacturer would’ve been able to build the trucks,” said McCoy. “Of those, 300 ended up going to a competitive OEM.”
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