Truck market recovering, but not ‘out of the woods’ yet

GREENSBORO, N.C. – Economic uncertainty continues to keep many truck buyers on the sidelines, but attractive incentives from OEMs are helping to move inventory.

Magnus Koeck, vice-president of product strategy and brand management for Volvo Trucks North America, said during a market update related to new VHD and VAH updates, that it’s difficult to predict when the truck market will fully recover.

Normally, Volvo Group provides a market forecast following each quarterly report. “We haven’t done that this time, because we don’t know where 2021 is going to take us,” Koeck admitted.

Volvo has had to make tough choices, including laying off 4,100 employees globally, many in North America. But on the positive side, it has used its facilities to produce personal protective equipment such as faceshields, has given back to drivers in the form of free meals on the road, has kept its uptime services functional remotely, its parts supply has remained steady, and it has continued to invest in future technologies.

As many as 3,000 Volvo employees have worked from home through recent months, but “our Uptime Center, where we monitor customers 24/7 has worked seamlessly,” Koeck noted.

(Photo: Volvo Trucks North America)

One disruption impossible to avoid is Volvo has had to discontinue invites to its Customer Center, where buyers can review the initial builds of an order and ensure they’re getting the exact truck they expected. Those reviews are now being done virtually.

“It has proven to work very, very well. Sometimes even better,” Koeck said, noting the tiny cameras used to show individual items can get into places that are difficult to see in person. “Of course, we hope we can open up for physical visits going forward.”

The downturn in the market, however, couldn’t have come at a worse time. Truck orders were already declining due to the normal cyclical nature of the truck business.

“We had a very high market coming down to more normal levels,” said Koeck, referring back to an update given at the 2019 North American Commercial Vehicle Show. “What we didn’t plan for was the Covid situation.”

“The overall industry inventory of trucks has come down significantly from pretty much record levels.”

Magnus Koeck, Volvo Trucks North America

The virus affected all global markets, and all of Volvo’s segments. The truck maker, and its competitors, began offering incentives to kickstart sales and orders, which Koeck said have proven effective, especially in reducing inventory from dealer lots to healthier levels.

“The overall industry inventory of trucks has come down significantly from pretty much record levels,” Koeck explained. He anticipates the effects of some of those incentives will be seen in summertime order activity – barring another widespread economic shutdown.

“It’s way too early to say we’re out of the woods,” he acknowledged. “We may see another forest coming up, but in principle, yes we see positive signs.”

James Menzies

James Menzies is editor of Today's Trucking. He has been covering the Canadian trucking industry for more than 18 years and holds a CDL. Reach him at james@newcom.ca or follow him on Twitter at @JamesMenzies.

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