Slowing truck orders due to ‘wait-and-see’ mood: Analyst

TORONTO, (Aug. 8, 2005) — Recent slowing of freight tonnage growth can’t be ruled out, but current softness in class 8 orders is likely due to seasonal dynamics and limited availability of ’05 production slots, say analysts at U.S. economic forecaster Bear Stearns.

Preliminary data puts May class 8 truck orders up 3.8 percent from April but down 4.1 percent from a year ago. Class 5-7 orders showed a better-than-expected 4.1 percent increase over May ’04.

Analysts told Heavy Duty Trucking that strength was driven mainly by bus orders. Decline in net orders for heavy trucks reflects customers’ “wait & see” attitudes regarding prices being quoted by OEMs, says Frank Sheehan, VP of global sales, marketing and planning at Dana Commercial Vehicle Systems.

Inventories are growing, but they’re not alarming and the sales ratio is still good, he says. Dana ’05 heavy truck production forecast — 299,000 units vs. 263,000 in ’04 — may be a bit low “but supply chain issues continue to make this recovery a lot more difficult than past recoveries and OEMs continue to push build schedules up,” he says.

Backlog for medium duty trucks dipped slightly in April but was up 30 percent from a year ago. Inventories and the inventory/sales ratio are a bit high, but builds and sales are steady.

— from Heavy Duty Trucking

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