Mixed signals on truck market

Heavy-duty truck production is expected to continue dropping in 2002, with light truck production, which includes pickups and SUVs, is expected to stay flat. Analysts expect the heavy-duty truck industry, as a whole, to deliver approximately 110,000 new trucks in the United States during 2002, compared to approximately 155,000 and 211,000 new trucks during 2001 and 2000, respectively. On the light truck side, sales are starting to improve, according to J.D. Power and Associates, but are expected to remain flat at 15.2 million units this year. J.D. Power added that, despite the continuation of aggressive sales incentive programs, domestic vehicle sales are showing the greatest year-over-year declines. Asian automakers are also experiencing a drop in U.S. sales, albeit approximately one-half the drop of domestic automaker sales, while European automakers are managing modest year-over-year gains, said J.D. Power. Asian truck makers have also improved their standing in the Class 4 medium- duty market of late, though their sales in other truck classes dropped significantly, according to Ward's AutoInfoBank. According to Ward's, 2001 truck sales dropped across the board in the U.S. except for Class 4 vehicles. Total sales in that class rose 9.7% to 52,037 vehicles in 2001, up from 47,417. A 43.6% rise in sales of Class 4 imports were responsible for that increase, said Ward's. In all other truck categories, however, truck sales dropped last year. Class 5 declined 16.5% to 24,362 units, Class 6 dropped 17.1% to 42,430 vehicles, Class 7 dropped 25.3% to 91,564 units, and Class 8 dropped by 34% to 139,614 vehicles. In terms of individual company performance, International was one of the big winners, according to Ward's numbers. The company made big gains in the Class 6 market, selling 10,587 units in 2001 versus 2,497 in 2000, a whopping 324% sales increase. W. Marvin Rush, chairman & CEO of Peterbilt dealership conglomerate Rush Enterprises, said the oversupply of used trucks continues to be the main reason for the decline in new truck sales, for both last year and 2002. As an example, he said his San Antonio-based company delivered 989 and 391 new and used trucks, respectively, during the fourth quarter of 2001, compared to 1,310 and 462 new and used trucks, respectively, for the same period last year. Those slumping sales dropped Rush's heavy-duty truck revenues to $152.1 million in the fourth quarter of 2001, compared to $170.2 million the year before. However, Rush noted that it ended 2001 in the black, generating net income of $3.3 million in 2001 despite a 12.5% decrease in revenues. Rush said its revenues in 2001 fell to $784.3 million, down from $896.6 million in 2000.

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