Market Upturn has Heavy Truck Industry Smiling

Sept. 24, 2014

Happy days are here again, at least for some people. Sales of new vocational trucks—pushed by road building and repair, home and commercial construction, oil and gas production, municipal business and pent-up demand—are up again this year, as they have been off and on since the Great Recession began its slow fade. Business is better, and existing trucks are old and worn, so fleet managers are replacing them, according to researchers and truck manufacturers.

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Class 8 retail sales of vocational trucks are up 9.2 percent through July, compared with last year, and should be up by 16.4 percent for all of 2014, according to Steve Tam at ACT Research in Columbus, Ind., who follows power-unit sales. “The second-half recovery that everybody’s been predicting is finally coming to pass,” he said in reference to the stronger forecast for the past five months. “We’re getting back to where the (truck) population was before the thing derailed in ’08.”

Trailer sales, too, are up “pretty much across all vocational categories,” said Frank Maly, who tracks trailer activity for ACT Research. Dry and liquid bulk tankers have risen after a slump in 2012, as have flatbeds; all are used by oil and gas producers to carry chemicals, sand, pipes and cement used in drilling and fracking. End-dump trailers needed to haul materials to road-construction and building sites are also up.

All manufacturers have specific models for vocational applications, and of course, these models are the ones most closely affected by the increased demand. Construction-related support vehicles, such as daycab highway tractors that pull bulk hopper or tank trailers to batch plants, are likewise selling better, though they might not show up as vocational sales. 

“One of the biggest developments this year is increased purchases by the concrete industry, specifically mixers and concrete pumpers,” said Stu Roselli, Mack Trucks’ vocational product manager. Charlie Cook, vocational marketing manager at Peterbilt Motors, agrees: “We’re seeing particularly strong sales of mixer trucks, which of course are used in a broad range of construction projects.”

Front-discharge mixer trucks—niche vehicles serving a niche market—have also revived after the business all but stalled in the recession. Oshkosh Truck and Terex Advance are again busy building new chassis with mixer bodies done by an affiliate (McNeilus for Oshkosh) and in-house (at Terex, which shut down for a year to redesign its plant and its truck product). They also produce glider-kitted trucks.

Indiana Phoenix, the third front-discharge mixer maker, continues its primary activity of building glider kits, using recycled power trains in new chassis with new cabs, barrels and drive apparatus. Phoenix assembles new trucks with Navistar diesels for Continental Mixer, and has also built tank trailers for a client that sold them to oil and gas producers.

Municipalities are buying vacuum-excavation trucks, among other types, and generally replacing aging vehicles, added Cook at Peterbilt. “Road building, residential and commercial construction are all rebounding, and in some areas, booming,” he said.

Buying habits have changed somewhat among construction-truck operators, said Alan Fennimore, vocational segment manager at Kenworth Truck. “Guys are buying trucks all year round now,” he said. “It was, buy in spring, put it away in the fall. They’re buying like businessmen now. And buyers have more confidence in the emissions equipment.”

“Vocational demand stems mainly from fleets replacing older fleets with newer, more fuel-efficient vehicles,” said John Felder, vocational marketing manager at Volvo Trucks. “We believe there is increasing demand in the construction market and road construction/renewal projects, and oil field applications.”

Daimler Trucks has likewise seen a burgeoning of the vocational market, and its Class 8 Freightliner and Western Star models were up by 36 percent in the first three months of 2014, according to Richard Howard, senior vice president of sales and marketing. Overall Class 6-8 vocational sales were up 24 percent in this year’s first quarter and 9 percent in the second quarter.

Daimler had a decent amount of vocational business with its Sterling Truck operation, but relinquished it when it killed Sterling at the start of the recession. It has regained much of that business, and is determined to capture more. Howard says Daimler’s biggest market-share gains will be in vocational, and it expects to have 32 percent of the Class 8 market in the United States, Canada and Mexico by year’s end.

“We’re at 30.8 percent (of Class 8) at the end of the second quarter,” said Dave Hammes, Daimler Trucks North America’s general manager, marketing and strategy. “Our goal in 2009 was to achieve a No. 1 position in that market by 2015, and we’re gaining share completely at the expense of other manufacturers.”

Vocational growth comes at a good time for Navistar International, which last year added the Cummins ISB and this year converted its own 9.3-liter diesels to selective catalytic reduction. Users report that the N9 and N10, called MaxxForce 9 and 10 in their pre-SCR configurations, are getting 8 percent better fuel economy. They are the primary powerplants in International’s severe-service models, and more of them should sell with the exhaust-emissions upgrade, said Emile Sabol, vocational sales director.

“It has been getting the product out there that has been slowing us up,” he said. “We have been putting a lot of demos out into the marketplace with a lot of our customers, and we believe more utility, crane, construction and municipality customers will come on board now that we have SCR products for the vocational market.

“The combination of the ISB with the Allison 3000 transmission will also have a big impact on the utility market,” he said. Last fall the Cummins diesel became an option in the medium-duty general-purpose DuraStar, and the ISB has been outselling MaxxForce midrange diesels.

Caterpillar executives are happy about sales of the Cat Truck, an enhanced version of Navistar’s PayStar 5900 series, which just expanded with an axle-forward model. “We have seen sales of Cat Trucks grow every year since launch,” said Ron Schultz, truck sales and support manager. “We have definitely seen an uptake in 2014 as the economy continues to rebound, and the rest of 2014 is looking very positive.”