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Commercial Truck Demand to Slow, Parts Remain Stout

January 28, 2016

Commercial fleets will register a lower growth percentage of medium- and heavy-duty trucks in 2016, but feed strong demand for aftermarket parts, according to a new forecast from IHS Automotive.

Registrations of Classes 3-8 vehicles including buses and motor homes should reach slightly more than 500,000 units by the end of 2016, registering modest growth from the projected 498,000 registrations in 2015, according to the report. The forecast is based on pre-release truck market data gathered in the first quarter of 2016.

Compared to just shy of 407,000 retail truck sales in 2014, the U.S. retail truck market climbed to some 450,000 trucks in 2015, with gains in the medium-duty segments (Classes 4-7) and Class 8. In 2016, heavy-truck demand should begin to weaken, following years of rising sales and weakening pressure to replace older vehicles, especially on-highway tractors.

With more than 12.6 million commercial vehicles on the road in the U.S., the commercial vehicle parts aftermarket is large and predicted to gain momentum in 2016. The increase in demand for preventive and general maintenance parts is due to the growth in commercial vehicle new registrations since the bottom of the market was reached in 2009. An increasing number of newer model vehicles are coming in for their first parts’ repair and replacement cycle.

Demand for long life-cycle parts, such as diesel engine overhaul kits, will soften in the coming years as more model years 2009, 2010 and 2011 vehicles come in for their first major overhauls, according to IHS analysts.

Demand for both general maintenance and long life-cycle parts is based on the number of Classes 3-8 vehicles operating on U.S. highways by the model year and applications, which determines the rate at which vehicles depreciate. Registrations of 2009 and 2010 model year Classes 3-8 vehicles didn't exceed 325,000 units.

An increasing number of 2009 and 2010 model year vehicles are coming in for major overhauls, which would imply soft demand for long life-cycle parts, following strong demand related to first major overhauls of 2005, 2006 and 2007 model year vehicles. More importantly, if only Class 8 vehicles are analyzed, registrations of roughly 100,000 of 2009 and another 100,000 of 2010 model year vehicles implies decreasing number of newer model vehicles coming in for first major overhauls.

Many general maintenance parts will have strong demand during the 2016 calendar year, and the analysis set volume forecasts for key components and their anticipated demand in the next 12 months including diesel oil filters (32 million), diesel fuel filters (19 million), diesel air filters (10 million), shock absorbers (4 million), intake exhaust valves (7 million), and hydraulic brake pad sets (3 million).

Long life-cycle part demand has been set for in-frame kits (259,000), replacement engines (13,000), cylinder heads (50,000), fuel pumps (400,000) and engine control modules (348,000).

The analysis also showed the commercial vehicle utilization mixture based on fleet size. Fleets with more than 500 vehicles are expected to have a the largest (35%) share of new registrations following by fleets with 2 to 250 vehicles (34%), single-truck users (25%), and fleets with 251 to 499 vehicles (6%).

Among vehicles in operation, fleets with 2 to 250 vehicles have the largest share (48%) followed by single-truck users (31%), fleets with more than 500 vehicles (17%), and fleets with 251 to 499 vehicles (4%).

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