Truck Dealers Strive To Meet High Demand
YOUNGSTOWN, Ohio – Sales of new over-the-road and heavy-duty trucks are on the move, and the region’s dealers are thrilled to go along for the ride.
“The market is going crazy. It’s just bonkers,” says Scott Williamson, sales manager at Fyda Freightliner in Austintown. “People want trucks and customers are very confident.”
Business among the dealer’s customers is better than ever this year, spurring larger-than-normal orders of new Class 8 trucks, Williamson says. Steel haulers, refrigerated trucking firms and even limited general freight haulers are experiencing a surge in demand that is keeping new truck dealers across the region busy.
Companies that haul steel on flatbed trucks are especially noticing an increase in activity since the United States slapped 25% tariffs on imported steel products, Williamson says. The corporate tax cut and new depreciation allowances in the tax code have created incentives for companies to purchase new vehicles to add to their fleets, he adds.
“I’ve been here 18 years and I’ve never seen it like this,” Williamson says. What makes this year unusual is that in the past, customers would race to purchase new cabs and tractors before new emissions laws would take effect. In this case, there are no new regulations scheduled for next year, so he says demand is strictly based on need.
Williamson reports that demand is so robust that manufacturer Freightliner sold out its new builds in March, leaving dealers scrambling to fill orders. “We’ve been taking orders for next year,” he says. “And it’s not just us. It’s every other OEM [original equipment manufacturer] out there.”
An overall improvement of the business climate and strength of the economy has freed up companies to purchase new over-the-road trucks, Williamson says. Moreover, owner/operators have stepped up orders for new vehicles, a departure from this segment’s traditional purchases of used tractors.
“The owner/operator segment is really growing,” Williamson says. “I sold more stock trucks off the lot this year than what I’ve sold over the last 10 combined.”
He says owner/operators realize the value of purchasing new rigs versus used, since the new models are equipped with the latest fuel technology and efficiencies. Plus, new vehicles come with warranties that cover major maintenance issues. “These are trucks that cost between $100,000 and $150,000 that they have to pay back in six years – and they’re doing it,” he says.
New over-the-road trucks are equipped with sophisticated safety features such as collision-mitigation systems that automatically apply brakes should it sense the vehicle ahead is slowing down and sensors that use satellite technology to assess the geography up to two miles ahead of the truck, detecting whether the driver is approaching an incline.
“It will automatically give you the torque you need to climb and slows the truck down when you reach the top of the hill,” Williamson says.
Class 8 trucks are easier to operate today than before, Williamson notes, since a vast majority are built with automatic transmissions. “They’re also extremely quiet. You can barely hear the engine,” he says.
If there is any factor holding sales up, it’s the tight labor market for drivers, Williamson notes. “It’s probably a blessing in disguise,” he says. “The market is growing, but because of the driver’s shortage, it’s not growing as fast as it could be.”
Other dealers say that while it’s good that the order book is bursting, it’s at the same time inconvenient because manufacturers can’t build trucks fast enough to satisfy demand.
“It’s a good problem to have,” says Jim Finnerty, general sales manager at R&R Trucking Inc., Austintown. “On the other hand, it’s frustrating since they’re not building stock units until the first of the year.”
R&R sells Mack and Volvo trucks, and demand has been incredible, Finnerty says. “Trucks that were ordered in March aren’t coming in until January. Manufacturers are doing what they can to keep up.”
Finnerty says 2018 is the second-best sales year since he joined the company just more than 10 years ago, and all indications point to an even stronger 2019.
According to industry projections posted on Statista.com, sales of Class 8 trucks across the United States are steadily on the rise. In 2017, dealers sold 182,600 units. This year, sales are expected to hit 205,300 and are projected to reach nearly 220,000 units in 2019. By 2020, it is expected that industry sales will crest 224,000 units.
Finnerty adds that sales of vocational trucks – that is, vehicles such as dump trucks or roll-off trucks used for regional purposes – are also very healthy. “We sell a lot of Mack vocational trucks in our Cleveland office and a lot of Volvo sleeper cabs out of Austintown,” he says.
Indeed, the market is strong for all classes of commercial vehicles at the moment, confirms Vince Cerni, vice president at Cerni Motors, Austintown. “I don’t think there’s one industry that’s more robust than the other,” he says. “Demand is high at every one of our eight locations.” The company sells the International brand of trucks and has dealerships in Ohio, Kentucky, Iowa and Indiana.
“Across the industry, both new and used truck sales volumes are up about 10%,” Cerni says. “I’d say we’re a little higher than the national average, since some local fleets have accelerated purchases.”
Business within the oil and gas industry has rebounded, so orders for heavy-duty trucks in this sector have increased as well, Cerni says. Meanwhile, the volume of freight shipments is also up, lending to more demand for Class 8 vehicles.
In between are other commercial-grade trucks that are also enjoying hot sales across the region. Next year, for example, International will launch its new CV series, smaller Class 4 trucks that are expected to arrive at the dealership by February 2019.
There’s also the prospect of experimenting with the electrical vehicle market in the near future, Cerni notes. “Everybody is coming out with electric vehicles,” he says. “All manufacturers are looking for it.”
The healthy market resonates through the sales of used trucks as well, Cerni notes. Over the past four months, prices of used commercial-grade trucks have climbed 12% to 18%.
“It’s very unusual for it to climb like that,” he says. “It’s an exciting time. We haven’t seen a market like this in eight years.”
Pictured: Fyda Freightliner salesman Mike Humes, sales manager Scott Williamson, salesmen Mark Christoff, Kerry Sullivan and Ron Knight say orders are booked into 2019.
Copyright 2024 The Business Journal, Youngstown, Ohio.