State of the Industry report by Act Research Company revealed orders for Class 8 vehicles dropped 42% in February from the previous year, while Class 5-7 net orders were the highest they have been since December 2014.
“The commercial vehicle industry, primarily the heavy truck segment, continues to struggle with adjustments in response to last year’s optimism and resulting overshoot,” said Jim Meil, ACT’s principal, industry analysts. “Problems persist with excess freight-hauling capacity, a weak freight pricing environment, and the overstock of heavy-duty trucks at dealerships.”
Meil said the positive aspects of the report are tentative and could take time to bring momentum to the market.
He added that medium duty vehicles were well positioned for continued steady growth in 2016, attributing this to healthy consumer balance sheets, rising new home construction, improved state and local government budgets and an absence of overbuying.