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Fleets Wait for Class 8 Trucks as Demand Exceeds Supply

June 28, 2004

Demand for heavy-duty trucks is shifting into overdrive as buyers place orders at the fastest pace in years, according to the eTrucker Web site. In April, Class 8 sales were up 33 percent over March, according to the National Truck Equipment Association (NTEA). March sales were up 90 percent over February. Freightliner has added a third shift and 593 new full-time jobs at the company's truck manufacturing plant in Cleveland, N.C. The additional shift is required to meet increased production demands, says Rainer Schmueckle, Freightliner president and CEO. Freightliner has also added 100 full-time employees to its Gastonia, N.C., parts manufacturing plant. Mack Trucks plans to increase production at both its Macungie, Pa., plant, which produces vocational vehicles, and at its New River Valley facility in Dublin, Va., where the company manufactures highway vehicles. John Walsh, Mack’s manager of trade relations, credits strong order support and strength in the North American truck market. At Macungie, the average daily production rate already increased from 58 units a day to 64 in early May. The plan was to further increase the rate to 72 by the end of June, and then again to 78 by late August. “We expect to add between 80 and 100 employees at Macungie as a result of these production increases,” Walsh says. At New River Valley, the company plans to increase the rate from the current level of 36 units a day to 60 in late August. Volvo Trucks North America brought back a second shift to its New River Valley plant in May. “It’s a very strong order environment,” says spokesman Jim McNamara, singling out Volvo’s redesigned VN models. “We have gone from one shift producing 73 Volvo VN trucks to two shifts producing 112 total,” McNamara says. Production will increase further in August, he said. Peterbilt also has increased production of medium- and heavy-duty trucks and tractors. “Peterbilt has adjusted, and will continue to adjust, employment accordingly to meet this higher demand,” says Dan Sobic, Peterbilt general manager and Paccar vice president. John Fay, director of marketing for International’s Heavy Vehicle Center, credits the manufacturer’s product lineup and its dealer network for its recent success. Production increases are being driven by higher shipping volume, a rebounding economy, and the need to replace older equipment to minimize maintenance costs, said Steve Gilligan, Kenworth general marketing manager. Kenworth operates plants in Chillicothe, Ohio; Ste-Therese, Que.; and Seattle and Renton, Wash. "Freight tonnage is very healthy, and interest rates are still relatively low," Gilligan says. "Truck fleets are replacing older equipment as concern over 2002 EPA-emission engines is fading and customers choose to purchase in advance of the 2007 emission standards.” Findings included in the second quarter Fleet Sentiment Report show a strengthening demand for trucks and trailers for the remainder of 2004. Seventy-seven percent of fleets responding to a questionnaire said they plan to buy tractors in the next six months, while 69 percent indicated they would purchase trailers. U.S. truck sales should continue to climb through next year, says Steve Latin-Kaspar, NTEA market data and research. Latin-Kaspar has projected sales of 200,000 units this year and 250,000 in 2005. Those numbers are in line with 1999’s record high of more than 250,000 units and well above the average of 150,000 for the last three years.
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