Preliminary March Truck Orders Lower Than Expected

Preliminary Class 8 net new orders for March, released by A.C.T., were 12,700 down 76% year-over-year (vs. down 69% year-over-year in February) and lower than Bear Stearns’ forecast of 14,000-16,000.

Class 5-7 net new orders for March 10,400, down 74% year-over-year (vs. down 37% year-over-year in February) and on the low end of Bear Stearns’ forecast of 10,000-12,000.

“Arguably, Class 5-7 orders are a ‘purer’ measure of economically derived demand, given that there was a smaller pre-buy in Class 5-7-although although we do think there was a ‘pre-build’,” Bear Stearns said in a release.

“We won’t know the break-out of export orders until mid-month. Our sense is that the sequential month-over-month downtick in the March data is likely due to further deterioration in U.S. domestic demand. We continue to believe the commercial vehicle downturn will be deeper and longer than the market expects. However, it generally feels like sentiment will afford the truck equipment stocks a near-term ‘pass.’ As long as the market continues to believe Class 8 will rebound in the second half of ‘07, weak orders near term may have only a modestly negative impact on the group.”

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