Inventory exceeds registrations as Class 8 orders rise

Orders for Class 8 trucks rose in September, pushing inventories ahead of registrations, while medium-duty truck orders dropped. 

After years of registration and production issues during the pandemic, the market for trucks continues to normalize including more normalized September truck orders, Manny Katakis, senior production analyst for medium- and heavy-commercial vehicles at S&P Global Mobility, said during an Oct. 9 webinar. 

“From 2020 through 2023, registration and production continued to outpace inventory with economic tailwind and high demand at odds with the industry fighting supply chain issues to build trucks, but now we have it where truck inventory is once again ahead of registrations,” he said. “There are positive signs … one of which is the recent inflow of truck orders for September.” 

As a result, the truck market should improve for to end 2024, especially following the Federal Reserve’s interest rate cut on Sept. 18, Katakis said. 

“We are more optimistic about 2025 than most because, even as inventory is climbing currently, the Fed has done a 50-basis-point interest rate reduction, and this should eventually improve truck demand,” he said. “Operators continue to replace aging fleets currently sitting around the average age of 13 years or so for Class 8s.” 

With September orders above 30,000 units for heavy trucks, the expectation is for a soft fourth quarter ahead of volatility caused by pending emissions standards tightening, Katakis said during the webinar. 

“Truck makers have looked to satisfy pent-up demand for trucks as average vehicle age climbed with growing inventory rates. However, we see a 2024 production drop,” he said. The industry is “on track for a soft Q4 2024 ahead of a marginal recovery in 2025, and the volatility of EPA 27, which is the big roller coaster.” 

Class 8 orders up, Class 5-7 fall 

September North America Class 8 orders totaled 37,100 units, doubling August’s intake and up 0.3% year over year, according to ACT Research’s State of the Industry: NA Classes 5-8 report released Oct. 02. 

“Class 8 orders jumped well above trend and seasonally elevated expectations in September,” Kenny Vieth, ACT’s president and senior analyst, said in a release today. “Historically, September is the first month of stronger orders, as the OEMs open their order books to next year’s orders.” 

Meanwhile, September medium-duty orders totaled 19,100 units, down 19.7% YoY, according to ACT Research. However, orders remained mixed across truck classes, Vieth said. 

“Medium-duty orders continued at range-bound levels on a very slowly declining trend,” he said. “Preliminary North America Classes 5-7 orders were mixed, rising nominally month over month, but falling seasonally.”  

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