Flat Year for Used Truck Market

COLUMBUS, IN —  ACT Research reported last week that the U.S. used truck market for class 8 units, after “a brief hiatus” in September, looks to be moving in the right direction sales climbing six percent in October.

Overall, 2012 has been a flat year for the class 8 used truck market, much of that having to do with what’s happening with fleets purchasing — or rather, reluctance to purchase — new trucks, explained Steve Tam, vice president-commercial vehicle sector with ACT, to todaystrucking.com. It looks to stay that way into 2013, too.

“Volumes for the total industry are down from where they were last year,” he explained when asked to frame the past year. That is indicative of the new truck market, Tam told todaystrucking.com. “If you think of where used trucks come from; they come from new trucks and new truck trade cycles have been fluctuating.”

“If you look back eight years, the average age of a truck when it gets to the used truck market,” Tam said, “you’re looking at some fairly lean years coming off that 2006 cliff of record north America production.” That means there are fewer trucks for the used truck industry to choose from. “Add to that the constraint that the used truck industry wants to try and stay away from 2007-compliant engines, and that makes it even tougher for them to find anything.”

Tam says he sees that trend continuing into 2013. “The good news is that we won’t be flooded with inventory like we have in previous cycles. So the situation has been one of scarcity and that’s really what’s happened in the pricing arena.”

Back in 2011, pricing was up roughly 25 percent from 2010, and it was up in 2010 over 2009, too. “So that scarcity really came to bear. The units through that time frame were a little bit older, and had a little bit higher mileage on them, but yet they were still seeing strong price appreciation.”

This year, pricing has remained flat for the industry as a whole. On the retail side, however, “we’re still seeing gains of eight to 10 percent,” Tam said, explaining that the auction and wholesale units are what’s “dragging things down.”

With new truck buyers not increasing their fleets, “any activity that we see on the new truck side then is surely replacement. So what we’re seeing here is a reflection of the new truck buyers hanging onto their trucks for longer and longer periods of time before they go ahead and make that conversion.

“We’re kind of the tail of the dog — we get what they give us.”