The Number 1 Resource for Vocational Truck Fleets

Article

Class 4-7 Truck Market 2010 Outlook: Mix of Good, Bad & Ugly

While small points of optimism signal the economy finally may be starting to recover, that recovery is weak. Truck sales this year will be barely better than the dismal 2009 market.

January 2010, Work Truck - Feature

by Jonathan Starks

A new year is finally upon us - a time for renewed vigor and optimism. Economic growth has returned, and the Great Recession has finally been squelched. Financial calamity was averted, and the once-frozen capital markets have begun the slow process of thawing out.

So, optimism abounds in the fleet manager's office, right? Probably not. The list of issues in front of you is an ever-growing concern, and the medium-duty new-vehicle markets are highlighting adaptability and can give us an indication of tomorrow's conditions.

The markets are a juxtaposition of the good, the bad, and the ugly - and will remain so throughout most of 2010. The good news: a strong sales recovery will eventually arrive. The bad news: a weak economic recovery is taking hold. The ugly: 2010 sales will barely be better than the dismal 2009.

The Good: The Difference a Year Makes

What a difference a year makes. This time last year, we were all busy trying to make heads or tails of the whirlwind happening around us. While recent economic activity might not be particularly robust, it is significantly better than what we experienced at the end of 2008 and beginning of 2009. Establishing a firm footing is the basis for any economic recovery to take hold, and economic growth creates the ability to finally begin the process of updating fleets and growing operations.

Housing, a strong market for medium-duty vehicles, has hit bottom and finally begun growing again. It is at a much smaller level than the historical average (about 1.5 million housing starts annually), but growth will suffice as good news right now.

In September 2009, housing starts were at 0.6 million units annualized, up 24 percent from its trough earlier that May, and had risen in four of the previous five months. Housing starts were expected to rise to nearly 0.9 million units by the end of 2009. Housing is likely to be on a bumpy ride through 2010, but all indications are for slow and steady growth to persist. (Chart 1.)

Chart 1. Housing, a strong market for medium-duty vehicles, has begun to grow. According to industry analysts at FTR Associates, the market is poised for slow and steady growth in 2010.

The best news is the medium-duty market may approach the peak levels seen during the last upturn within the next five years. It took nearly 20 years to rebound that strongly after the collapse of the medium-duty (MD) market during the 1970s and 1980s. Pent-up demand and a shift in buying decisions will help fuel a strong recovery.

A strong engine for growth is looking to be lighter range Classes 4 and 5 GVWR vehicles. This market experienced more growth than the heavier Classes 6 and 7 vehicles after the 2001 recession (nearly 35-percent stronger) and has seen a slightly smaller decline during the ensuing 2009 downturn. This market is much more attuned to the needs of a fuel-conscious consumer. Fuel costs have come down significantly over the past year, but the focus of many fleets has not waivered in mitigating its impact.

Comment On This Story

Name:  
Email:  
Comment: (Maximum 10000 characters)  
Leave this field empty:
* Please note that every comment is moderated.

FleetFAQ

Fleet Faq Fuel Management

Bernie Kanavagh from WEX will answer your questions and challenges

View All

 

Fleet Tracking And Telematics

Todd Ewing from Fleetmatics will answer your questions and challenges

View All

 

Fleet Management And Leasing

Merchants Experts will answer your questions and challenges

View All

 

Sponsored by

Kenneth Glaser worked with Lend-Lease Transportation Co.

Read more

Blog

Market Trends

Mike Antich
Top Trends, Challenges, & Opportunities in South American Fleet Market

By Mike Antich
The South American fleet market has tremendous potential that will grow in tandem with the forecast of the region’s retail automotive market growing significantly by 2025, becoming one of the top three growth markets globally for light-vehicle sales.

IBM Watson Will Revolutionize Health Care: Can It Be Integrated into Fleet Processes?

By Mike Antich

Chatty Chassis

Lauren Fletcher
What Makes Fleet Management so Special

By Lauren Fletcher
What is it about fleet and fleet management that engages so many of us? What keeps us around for decades, regardless of the ups and downs? And still entices new entrants?

How to Stay Productive Over the Holidays

By Lauren Fletcher

Driving Notes

Chris Brown
Hyundai Ioniq Plug-in Hybrid

By Chris Brown
The Hyundai Ioniq Plug-in Hybrid is the least expensive model on the market to offer electric-only range, while offering spirited driving performance and plenty of standard features.

2018 Range Rover Velar First Edition

By Mike Antich

Nobody Asked Me, But...

Sherb Brown
Fleet Management 2.0

By Sherb Brown
Data is driving fleet decisions more than ever. Whether it’s big data or small data, fleet management is becoming less of an art every day and more of a science.

Ready or Not, Electrification Is Coming

By Sherb Brown

Data Points

Dylan Brown
What Are the Most Valuable Services Offered by FMCs?

By Dylan Brown
What do fleet managers value in their relationships with fleet management companies? The answer may surprise you.

Demand More From Your Fuel Card Provider

By Dylan Brown

STORE