’07 downturn looms, but no consensus on how severe

LOUISVILLE, Ky. — Truck OEM representatives agree the industry is bracing for a downturn in 2007, however estimates on how serious the heavy-duty fall would be varied among truck manufacturers and suppliers.

With booming 2006 sales on pace for all time record high — largely fueled by a massive pre-buy to avoid possible pitfalls with mandated, more expensive 2007 engine and ultra low diesel technology — the industry has no choice but to deal with a sales slump anywhere between 30 and 45 percent for the better part of next year.

The Class 8 sales slump for next year is predicted
to be anywhere from 30 to 50 percent.

Starting this January, all diesel engines on the market will have to cut particulate matter by 90 percent of 2004 levels to 0.01-g/hp-hr, and 0.02-g/hp-hr by 2010 for NOx. All engine OEs — including cat, which uses its proprietary ACERT technology instead of exhaust gas recirculation (EGR) — have added diesel particulate filters (DPF) to meet this standard.

Joe McAleese, president and CEO of Bendix, opened the Mid-America Trucking Show recently by suggesting Class 8 truck volume could drop by 40 percent. To be sure, the company is designing contingency plans around a possible 50 percent downturn.

Sales should recover in 2008, says the OEMs, and there is likely to be another massive pre-buy in 2009 as the toughest round yet of EPA emissions rules looms for 2010 implementation.

Freightliner President Chris Patterson’s estimates were slightly lower, saying the industry should expect a downturn between 35 and 40 percent.

However, executives from other truckmakers, especially those with new class 8 lineups slated for 2007, anticipated even less of a sales drop. Peterbilt GM Dan Sobic — whose company unveiled an upgraded class 8 product launch, as well as two brand new medium-duty trucks — says he’s generally more optimistic than others in the industry.

“I’m getting a much more optimistic sense from our customers about ’07 technology,” Sobic said. “Our largest customers are still planning to buy in ’07, largely from a need to continually upgrade trucks to attract drivers.”

Tom Baughman, vice-president and general manager of International Truck & Engine’s Heavy Truck Group, said sales would only slump to about 30 or 32 percent.

A year after first announcing it had a new flagship highway tractor under its tent, International Truck & Engine finally unveiled its new ProStar Series trucks at the Mid-America Trucking Show.


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