FTR reports May Class 8 net orders meet modest expectations

Freight transportation forecasting firmFTR Associatesreported this week that its preliminary data for May Class 8 truck net orders came in at 17,650 units.

FTR said this number, which represents orders for all major North America-based OEM’s, is up following four months of declines to start the year, with May up 5 percent over April and down 24 percent compared to May 2011. And it added that the annualized order numbers for the most recent three-month period—including May—trends out to 216,700 units, which pales compared to the 308,000 annualized rate from the December-February period.
FTR officials said that May orders were within its expectation range although it remains below previous projections and estimates by various industry stakeholders.

And FTR President Eric Starks said in a statement that the ongoing weakness is putting additional pressure on the OEMs to lower their build rates over the next several months, adding that with monthly orders in the 17,000 range and production in the 25,000 range there is a “disconnect” in effect.

“A dramatic increase in order activity is needed in order for the OEMs to continue production at their current pace,” Starks said. “Over the next few months we expect orders to remain near current levels, as the summer is traditionally a slower time of the year for order activity. It is important to note that even with the recent slowing in order activity, the levels are still relatively healthy for the industry.”

FTR Director of Transportation Analysis Jon Starks reiterated that point, explaining in an interview that while things are sluggish on the orders front, they are not necessarily bad.

One reason for this disconnect, said Jon Starks, is that there was way too much optimism on the OEM side.

“They got ahead of themselves and saw things going in one direction much too fast, so when we get to the back half of 2012 we think there is going to be a significant reduction coming in terms of what the OEMs are doing,” he explained.

Unless there is a strong surge in orders in the next few months, Jon Starks said it is very likely OEM production numbers are going to have to come down. He also noted that a “weak spell” for orders in 2011 carried over into 2012, with OEM’s requiring time to sort through the net effect of orders.

鉴于这种情况,他说理所当然that Class 8 sales will be sluggish for the next 6-to-12 months.

“At the beginning of the year OEMS were producing well above what the sales environment was and had built out quite a bit of inventory on the production side,” said Jon Starks. “Sales did not drop off, though, instead they were more sluggish than anticipated.”