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Class 8 Order Retreat Based on Lack of Supply

FTR reported that preliminary Class 8 orders of 28,100 units in September – down 29% from August and 12% year over year – is due to lack of supply, not industry demand.

The forecaster says the pullback is due to OEMs managing Q1 production slots such as rolling 2021 orders into the new year and delaying 2022 bookings.

“This is a complicated, bizarre situation that OEMs have never before encountered,” explained Don Ake, FTR’s vice-president – commercial vehicles. “There are many orders that were expected to be built in 2021 that cannot be completed due to the severe component shortages, most notedly, semiconductors. The OEMs are unsure when they can build the leftover 2021 orders and any new orders because the parts shortages are now expected to continue well into next year. They can’t schedule production because they don’t know their actual build capacity.”

Ake added September’s order weakness is not a true indicator of 2022 truck demand.

“There is significant pent-up demand for trucks leftover from 2021 because OEMs were limited in their output,” he added. “Add to this the robust demand expected for 2022 due to sturdy freight growth. The fleets have a tremendous need for new trucks in 2022, however, the OEMs are delaying entering orders until the supply-chain situation is clearer. Unfortunately, the supply chain remains a huge mess. Parts and components are so constricted, as well as raw materials, it will take many months to rectify, and conditions are expected to improve gradually, over an extended period.”

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