Work Truck Solutions Q2 2024 Commercial Vehicle Market Analysis: Evolving Inventory and Alternative Fuel Trends

Statistics hint at a buyer’s market on the horizon

Work Truck Solutions^®, the leading commercial vehicle authority, released its Q2 2024 Commercial Vehicle Market Analysis today. The Q2 data for new and used vehicles highlights that inventory levels, pricing, and sales numbers are, for the most part, following persistent trends. In contrast, the landscape of alternative fuels in the commercial vehicle market remains in flux.

Sales

• New: Average sales decreased by 4.8% QoQ and 7.3% YoY.
• Used: Average sales increased for the first time since Q1 2023, showing 2.9% QoQ growth, though it’s still down 17.6% YoY.
• Hybrid/Electric work trucks and vans: Average movement of new hybrid/electric work trucks and vans increased significantly, up 35.0% QoQ and 28.6% YoY.

Commercial Inventory

• New: On-lot inventory per dealer continued its upward trajectory, growing 9.7% QoQ and a substantial 66.6% YoY with quarterly growth being primarily early in the quarter, indicating a need to continue to closely monitor these numbers to see if a new trend is developing, or it’s an anomaly. The growth was evenly distributed between medium-duty (51.8% of inventory) and light-duty (48.0% of inventory) vehicles.
• Used: On-lot inventory stabilized QoQ, following several quarters of decline, though it remains 18.5% lower YoY.
• Alternative Fuels: A significant 46.5% decrease in new stock of hybrid/electric work trucks and vans QoQ was observed, marking a 25.8% drop YoY.

Prices

• New: Average prices for new work trucks and vans increased slightly by 0.6% QoQ and more substantially by 6.8% YoY, reaching a record $58,470.
• Used: Average prices for used work trucks and vans experienced a 1.7% decrease QoQ and a more pronounced 6.1% decline YoY, averaging $33,804.
• Work truck and van BEVs: The average price of battery electric vehicles (BEVs) decreased by 3.7% QoQ (from $53,612 to $51,643) and 11.0% YoY.

Days to Turn

• New: Average Days to Turn (DTT) increased significantly QoQ (14.5%) and YoY (40%), reaching 119 days, the highest average level since 2020, largely due to increased inventory as well as increasing interest rates.
• Used: DTT remained stable QoQ and decreased 8.3% YoY, with an average of 55 days, suggesting a leveling-off trend.

Takeaways

Data from the commercial vehicle market is revealing an inexorable swing from the days of scarce inventory, with many of the corresponding ripples that come with increased availability.

Sales Dynamics: New vehicle sales continue to slow down, while used vehicle sales showed a slight uptick. Interestingly, the movement of hybrid/electric vehicles increased significantly.

Mixed Inventory Trends: The new work truck/van market continues to experience inventory growth, especially in medium-duty vehicles, while used inventory has stabilized. However, the electric vehicle segment saw a substantial decrease in new stock.

Price Adjustments: Prices for new and used work trucks continue to adjust, with slight increases in new vehicle prices and more significant decreases in used vehicle prices. Electric vehicle prices also declined both QoQ and YoY.

Vocation Types: Among the commercial van categories—new cargo, box, passenger, service-utility, upfitted-cargo—cargo and passenger continued a general upward trend in availability and movement, while the others continued a general upward trend in on-lot inventory, but a generally flat or declining sales trend. All van types are experiencing increased DTT, both QoQ and YoY.

Chassis Types: New Cab Chassis inventory continued to climb both QoQ and YoY, while Cutaway Chassis inventory declined both QoQ and YoY, and Stripped Chassis availability was erratic. However, movement among all three chassis types either dropped or remained flat and are sitting on the lot longer.

“Although inventory is not back to pre-pandemic levels, we’re seeing indicators that suggest a run toward a buyer’s market is in the making,” said Aaron Johnson, CEO of Work Truck Solutions. “We noted the data shift in our Q1 2024 data report, and we can reasonably expect these trends to continue. Of course, all of this is subject to emerging local and international affairs, which impact trajectories.” Regarding EVs specifically, Johnson commented, “With many OEMs producing fewer EVs, and sales spiking over the last quarter as buyers take advantage of government incentives, we’ll have to watch to see if this becomes a pronounced trend following the November elections.”

Wrapping up, Johnson noted, “The way end-users shop has evolved into a highly digital affair and is certain to remain that way, so it is wise for commercial vehicle dealers and upfitters to embrace modern merchandising technology.”

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