According to the latest preliminary release of the State of the Industry: U.S. Classes 3-8 Used Trucks report published by ACT Research, preliminary used Class 8 retail volumes (same dealer sales) in May fell 10% month over month and were 40% lower compared to May of 2021.
Other data released in ACT Research’s preliminary report included month-over-month comparisons for May 2022, which showed that average retail prices (down 1%) and average ages (up 1%) both were virtually unchanged, while average miles were 2% lower than April. Compared to May of 2021, average retail prices were 66% higher, with average miles and age greater by 4% and 7%, respectively.
“Unfortunately, long-awaited reports of loosening inventories come at exactly the wrong time in the cycle,” Steve Tam, vice president at ACT Research, said. “At the same time, this is part of the phenomenon that defines an inflection point of the cycle. Freight growth is slowing, soon to begin shrinking. Yet, since profitability tends to lag the cycle, truckers continue to make money and invest in equipment, ultimately ‘over-capacitizing’ the market. As a direct result, the industry is already seeing significant downward pressure on freight rates, which will result in decreased truck demand and, ultimately, lower truck prices.
“Nevertheless, overall pricing for Class 8 trucks was remarkably resilient in the face of all of the challenges with which it is currently confronted, and needless to say, further, steeper declines are already impacting segments of the market and expected to broaden. This is the beginning of the end of the cycle, which promises to be every bit as exciting on the way down as it was on the way up.”
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