Growth in Economy Buoys Sales of New Trucks
YOUNGSTOWN, Ohio -- Sales of new heavy-duty and medium trucks are on the rise as transportation companies replenish aging fleets and a steadily improving economy lifts business prospects for industries across the board, area dealers say.
“We’ve seen an uptick over the last 24 months,” reports Scott Davis, sales manager at Cerni Motor Sales Inc. in Austintown, which sells International brand trucks. “We’ve had a lot of success with local customers and we’ve seen business pick up.”
Major fleet purchases of new tractors and trailers, plus a steady business for medium-duty trucks tied to the housing and construction markets, have helped sales at dealerships across the region, report representatives from Cerni, Fyda Freightliner, and R&R Trucking Inc., all of Austintown.
At Cerni, sales of medium-duty trucks are rising because of a rejuvenated housing market, Davis reports. “It’s fairly strong at the moment,” he says. Business related to major fleet customers also appears very strong, and even the owner-operator market is showing signs of improvement.
“They’re struggling with initial costs, but that market segment is improving,” Davis says. Business with customers with smaller fleets is “OK,” he adds, but isn’t growing at the rate of larger customers. “It’s not where we’d like it to be.”
International, Davis says, is beginning to gain market share since the truck manufacturer restored Cummins engines to its product lines. “We’ve seen it pick up.”
Those in the market for larger, over-the-road tractors are especially conscious of cost, which helps drive a robust used heavy-duty market, Davis says. In particular, owners are searching for those trucks with minimal emissions equipment and aren’t governed by new federal environmental mandates.
“There’s price support with demand for some of the older trucks,” he says. “With the Internet, people will travel for miles to buy a truck at the price they want it.”
New federal regulations require that new trucks take measures – often by adding new equipment – to reduce greenhouse gases into the atmosphere, which presents a challenge to all dealers and their service departments. “You learn how to live with it and do maintenance on new emissions components,” he says.
A more relaxed lending environment is helping to fuel more sales of new trucks, observes Scott Williamson, sales manager at Fyda Freightliner. “Banks are easing up,” he says.
“There’s a steady interest in new trucks,” Williamson continues, based on the robust number of recent inquiries and quotes the dealership has processed.
Market share for Freightliner trucks still hovers around 40%, Williamson says. “Sales should be ahead of last year if things continue to go the way they’re going.”
One reason Freightliner is capturing a large segment of the market is the make’s SD, or severe duty, line, the sales manager notes. “The Coronado SD and the 114 SD are geared toward oil field and off-road vocational use,” he says.
These models have demonstrated impressive fuel economy as does the new Cascadia Evolution, Williamson relates. “The new Evolution package gets great fuel mileage and the feedback has been very positive.”
If there is one force holding back truck sales and the industry in general, it’s the lack of supply in the used-truck market and the difficulty companies have in finding properly trained drivers, Williamson adds. “A lot of fleets want to expand, but it’s difficult filling the seats with qualified drivers.”
There is some interest from companies that do business with the oil and gas market, but not as much as last year, he continues. “A lot of people jumped in and it was a bit premature since the infrastructure isn’t there.”
New sales to the major drillers are, for the most part, elusive to area dealers, says Jim Finnerty, general sales manager at R&R Trucking, Mack and Volvo truck dealership. “A lot of them have come from out of town and brought their own trucks and equipment.”
However, those out-of-town trucks need to be maintained and the service department remains very busy, Finnerty says. “We think it’s really positive, and we’re very excited about what we’re seeing.”
What’s really moving the market for R&R, Finnerty says, are the new trucks Mack and Volvo manufacture. “Business is on the upswing, based on the proposals I’m sending out,” he says. “Various fleets are revamping and updating. Some companies have held on to trucks two or three years longer than they wanted to, so now they’re starting to replace them.”
Two models in particular, the Mack mDrive and the Volvo I-Shift, are “game changers” for the industry, Finnerty posits.
The Mack mDrive is a 12-speed fully automated manual transmission that behaves as an automatic, Finnerty says. “It doesn’t have a clutch pedal. It’s like driving a light-duty car or truck.”
One customer, he relates, had a driver who worked 30 years for a company and was on the verge of retirement when Finnerty placed him in a new Mack.
Once the driver experienced how the new Mack operated and functioned, he went to his employer and said he would postpone his retirement under one condition: that the new truck was his to drive.
“He stayed another three years,” Finnerty laughs.
First published in the MidJune edition of The Business Journal, Youngstown, Ohio.
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Copyright 2013 The Business Journal, Youngstown, Ohio.