As published in the latest release of ACT Research’s North American Commercial Vehicle Outlook, expectations for Class 8 trucks and trailers have lowered as a recovery in freight markets remains elusive.
“Within the broader Class 8 and trailer markets, U.S. Class 8 tractors and van trailers bore the brunt of the markdowns as freight metrics have failed to gain traction,” Kenny Vieth, president and senior analyst at ACT Research, said. “Less money in carriers’ pockets and lower industry build rates in 2024 also push down on 2025 and, to a lesser extent, 2026.”
If circumstances force the trucking industry to materially cut production in 2024, thereby leading to a downsize of the labor force, supply-chain integrity could be compromised, according to ACT Research.
“If layoffs do come to pass, it will be difficult for the industry to scale rapidly in 2025 and 2026 when U.S. and Canadian truckers and dealers will want all the equipment the industry can build,” Vieth said. “ACT’s research suggests that between prices, taxes and other affiliated costs, MD and HD vehicle costs will rise by between 12% and 14% as the EPA’s clean trucks regulation goes live in 2027. As such, we believe the OEMs will be at least partially successful in convincing customers to begin EPA ‘27 prebuying in 2024. Starting prebuying earlier should help moderate runaway demand into 2026 but risks prolonging the freight cycle downturn.”
ACT Research believes that “it’s different this time” factors are at work in 2024, and those factors will help support a fundamentally weak U.S. tractor market. Those factors include ongoing pent-up vocational truck demand, strong tractor demand in Mexico and labor hoarding.
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