Work Truck Solutions released its third-quarter 2023 Commercial Vehicle Market Analysis. Data reveals a growing demand for new work trucks and vans, with average prices reaching record highs.
Meanwhile, used work trucks and vans continue to show higher average mileage when compared to all but one-quarter of 2022.
New Commercial Vehicles: Prices Rise, Dealers' Inventory Soars
The market for new commercial vehicles is experiencing notable trends. Average vehicle prices have seen a 5.5% increase quarter-over-quarter (QoQ) and an 8.2% rise year-over-year (YoY).
Dealers are witnessing growth in on-lot vehicle inventory, with a remarkable 12.4% increase quarter over quarter and a 78.6% surge year over year.
The Average Days to Turn metric demonstrated a slight uptick of 1.9% QoQ but an astonishing 46.0% YoY increase.
Although vehicle sales dipped by 1.4% QoQ, it's worth noting that they remained on a positive trajectory with a 15.3% YoY increase.
This decrease in sales in Q3 is attributed to the saturation of pent-up demand that was met in Q2, aligning with the surge in on-lot inventory earlier in the year.
Additionally, searches for new work trucks and vans increased by 1.1% QoQ, with continued YoY growth, driven in part by the increased on-lot inventory, which has boosted customer confidence in immediate acquisitions.
However, commercial vehicle buyers are also becoming more forward-thinking, recognizing the potential permanence of the pre-order process.
Fluctuations in Used Commercial Vehicle Prices and Inventory
In the used commercial vehicles industry, several noteworthy trends have emerged.
Average vehicle prices exhibited a modest 1.6% increase quarter-over-quarter while experiencing a slight 1.0% decrease year-over-year.
On the front of on-lot vehicle inventory, there was a 5.25% decline QoQ, but it remained virtually unchanged from the previous year, showing a mere 0.3% increase.
The Average Days to Turn metric displayed a 3.9% dip QoQ, following a significant 9.0% drop from Q1 2023 to Q2 2023.
Although vehicle movement, or sales, experienced a cooling off in this quarter, with a 2.3% decrease in the average number of used work trucks and vans moved per dealer QoQ, it was still notably up by 12.3% YoY.
Notably, the median mileage of used work trucks and vans has remained relatively high, with only marginal effects on prices.
Mileage decreased slightly by 2.2% QoQ and showed a 4.2% decrease YoY, potentially signaling a new trend in the age of used vehicles as older inventory gradually leaves dealership lots.
The availability of new vehicles may influence this shift, as businesses opt to replace fleet vehicles before accumulating excessive mileage.
Notably, even as some manufacturing recovery from pandemic-related downturns occurs, other issues, such as labor strikes, can still have a significant impact on used vehicle mileage and price.
"As we analyze the market for work trucks and vans, the data indicates continued strong interest in new vehicles, even as the average price for them has hit a record high of $57,290," says Aaron Johnson, CEO of Work Truck Solutions.
"These insights signal a potential shift towards newer commercial vehicles — especially a desire for medium-duty — requiring strategic adjustments to inventory and a careful watch on these trends, including the upfit configurations that are critically important to buyers in your market. Having the tools to ride these waves will set some dealers apart from those who try to return to ‘business as usual."