Commercial Vehicle Orders Likely to Slow in 1Q

Net orders for heavy-duty commercial vehicle markets closed 2009 slightly stronger than expected, but will likely slow dramatically in the first quarter of 2010 before recovering in the second half of the year, according to ACT Research Co. (ACT).

In the latest release of the ACT North American Commercial Vehicle Outlook, ACT predicts heavy-duty (Class 8) vehicle production will grow 22 percent year-over-year in the first quarter, largely due to stronger orders last quarter in advance of new EPA 2010 emission mandate engines and very easy annual comparisons. With build slots for pre-mandate engines virtually filled, orders are likely to slow for the newer and more expensive engines. Medium-duty vehicle (Classes 5-7) production, which is largely tied to health of the housing market, is expected to see a more steady and gradual increase in production through 2010 and 2011.

“With the industry out of pre-mandate build slots, there is very little near-term support for domestic order activity,” said Kenny Vieth, partner and senior analyst with ACT Research. “Since the price of a new Class 8 unit is set to rise sharply and the trucking industry is still dealing with excess capacity and weak used sales values, we expect OEMs will be particularly aggressive marketing product outside the U.S. and Canada.”

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