Heavy-Duty And Medium-Duty
Trucks Going Down Distinctly
Different Roads
BY JOHN BURTON
For the past several years, the heavy-duty and medium-duty North American vehicle production levels have followed similar
tracks. Both peaked in 2006, largely
due to the pre-buy ahead of the EPA
2007 emissions mandate. Over the
following two years, production levels
fell sharply for both segments, with
2008 production down 43% from 2006
for Class 5-7 and 45% for Class 8.
Just when many thought the cor-
rection was over, the financial crisis
hit and 2009 became a time to just
survive. North American Class 5-7 pro-
duction fell another 38% to just 98,000,
while Class 8 production was hit even
harder, dropping an additional 43%.
JOHN BURTON
John Burton is vice president – transporta-
tion sector for ACT Research, a provider of
commercial vehicle (CV) market analytics and
forecasting for the North American and China
CV markets. The company recently introduced
a report on the U.S Used Truck Market after
building an extensive database of used truck
transactions. For additional information, visit
www.actresearch.net.
• Fleet age: The driver of replace-
ment demand. In a normal year,
75 to 80% of demand is driven by
replacement of worn-out units.
• Economic growth: Class 8 trucks
are the primary haulers of freight
in North America, and the result of
economic activity is freight to be
hauled. Consumable goods (food,
soaps, etc.) and service-related
activities make up the bulk of
economic activity, but it is durable
goods and investment by consum-
ers and businesses that drive mar-
ket cyclicality. From 2007 to 2009,
while the overall economy fell by
$348 billion, durable goods spend-
ing and consumer and business
investment fell by $607 billion.
• Trucker profitability: As the prima-
ry buyers of Class 8 equipment,
truckers have to be making money
to invest in new equipment.
•Used truck values: The gap
between new and used truck
prices has to be reasonable for
truckers to trade. If the gap is
too large, fleet aging becomes a
viable option.
The future looks much improved
for Class 8 demand because each
