LOUISVILLE, Ky. - Of all the trucking industry prognosticators who gave state-of-the-industry addresses at the Mid-America Trucking Show, it was perhaps the bulldog that was the most bullish about whe...
LOUISVILLE, Ky. –Of all the trucking industry prognosticators who gave state-of-the-industry addresses at the Mid-America Trucking Show, it was perhaps the bulldog that was the most bullish about where the industry could be headed this year.
Kevin Flaherty, senior vice-president, US and Canada for Mack Trucks, said it’s possible Class 8 retail sales could see a 20-30% improvement this year if the long-awaited effects of stimulus spending finally kick in. His outlook was considerably more optimistic than other executives who gave industry overviews at the truck show.
“What we’re seeing in 2010 right now, we’re starting to feel there is some bubbling of activity out there,” said Flaherty. “Could we see a 20-30% improvement over 2009? I don’t know. There’s a possibility we could see that. Personally, I think we have a shot as an industry of growing towards that 20%-plus this year, but obviously we’re going to have to have more positive indicators and we’re going to have to see more stimulus funding kicking in.”
Flaherty said the overall mood on Wall Street has improved and fleets are beginning to place orders for new trucks. This after a dismal 2009, in which Class 8 retail sales totaled less than 95,000 units in the US and between 11,000 and 12,000 units in Canada.
“These are historical lows,” Flaherty pointed out. “We’re pleased 2009 is over.”
Flaherty said Mack is receiving positive feedback from customers with its EPA2010 products using selective catalytic reduction (SCR).
“Two-thousand-and-ten technology with SCR is quite frankly going to be a non-event,” Flaherty said. “By the fall, it’s not going to be an issue.”
Another reason for optimism is that the Volvo Group’s used truck division, Arrow Truck Sales, is also seeing a recent increase in sales.
“That is a very good sign that things are improving,” Flaherty said. “We’re seeing fleets taking that first step, saying ‘You know what, I need some trucks. I’m not fully committed to buying new right now, but I’m in the market to take on some late-model trucks’.”
As for its core markets, Flaherty said Mack’s construction truck segment is still suffering from a weak housing sector.
“We need housing, that’s very important,” he said. “We’re not going to see housing for quite a while, so we need roadwork. We hope the stimulus will kick in and get that going. We can’t have another 12-18 months where contractors are just repaving roads. That’s what we’re seeing, but we need some big projects to kick in.”
The refuse segment, another where Mack is traditionally very strong, has also softened, but Flaherty said he expects it to bounce back strong in 2011.
As far as highway tractors are concerned, Flaherty admitted Mack has lost some ground, but vowed the company will fight to recover that market share.
“You’re going to see a very intense focus out of Mack to get our share back on the tractor side,” he said. “You’ll see Mack bring back that tractor business going forward over the next couple years.”
Finally, Flaherty made a point of emphasizing several times that Mack trucks will continue to be built in the US. Noting Mack was founded in Brooklyn, N.Y. over 100 years ago, Flaherty said “Can you see the day we should be building that product in Mexico? We export trucks, we don’t export jobs.”