Class 8 Regression to the Mean Coming in 2020

2020 may bring significantly lower sales and production but a good prospect of improvement off current low order rates

According to ACT Research’s recently released Transportation Digest, the Class 8 market is moving from 2019 peak activity in sales and build into a substantial correction in 2020. Activity for the total MD market was jumbled in August, confirming the dichotomy of the various facets of the industry.

The report, which combines ACT’s proprietary data analysis from a wide variety of industry sources, paints a comprehensive picture of trends impacting transportation and commercial vehicle markets. This monthly report is designed as a quick look into transportation insights for use by fleet and trucking executives, reviewing top-level considerations such as for-hire indices, freight, heavy and medium duty segments, the total US trailer market, used truck sales information, and a review of the US macro economy.

“With a major trade caveat, our underlying view is that the economy will have slower growth but not recession, so the heavy duty truck market rebounds and enjoys three years of growth from 2021 to 2023. However, the far years of this forecast are influenced by the prospect of stringent emission controls in 2024, triggering a 2023 prebuy, followed by a 2024 payback,” said Tim Denoyer, ACT’s Vice President and Senior Analyst. He continued, “This regression-to-the-mean for 2020, after near-record production in 2019, has been our forecast since early 2018, so shouldn’t surprise our subscribers.”

Regarding the medium duty market, Denoyer commented, “On one hand, customers are confirming their concern about the near-term future, as exemplified by the continuing pullback in order activity. On the other hand, customers also continue to purchase new vehicles at near-record rates. This dynamic is set to change in 2020, with significantly lower sales and production but a good prospect of improvement off current low order rates.”

Category: Equipment, Featured, General Update, News