The overall value of the retail sleeper tractor market

Transcription

1 Commercial Truck June 213 Guidelines NADA Commercial Vehicle ket Update INSIDE: Retail ket Continues to Set Records; Wholesale Retail Sleeper ket Sets Another Summary Sleeper Tractors ket Changes Course Summary Record Sleepers up 1.2% month-over-month, 3.3% year-over-year Retail The overall value of the retail sleeper tractor market Devaluation in Wholesale ket Turns Sleeper Tractors Wholesale Special Study: Model vs. Model Retail Pricing Medium Duty Cabovers and Conventionals Sales Volume Conclusion Fuel Prices set a new record high for a second month in a row. An increasing number of newer model year tractors entering the market combined with continued strong demand for sub-6, mile trucks are the main factors behind recent gains. The steep drop in wholesale pricing that started in December of last year turned around a bit in il, thanks to a slightly newer, lower-mileage mix of trucks sold. We continue to view the auction channel generally as a market for trucks with over 6, miles. A competitive pricing comparison reveals the relative Around Slightly newer, lower-mileage mix of trucks supports higher pricing How Do Specific Models Measure Up? Competitive comparison of individual makes and models Medium Duty Recovery Takes a Breather Conventionals down, cabovers stable Retail and Wholesale Sales Volumes Continue to Diverge Retail market steady, wholesale market up notably Economic Data value the marketplace assigns specific makes and Value Trends models. Retail sales volume has not changed appreciably, while wholesale volume continues to trend notably upwards. The domestic economy continues to $55, $5, $45, Average Retail Price and Mileage - All Sleeper Tractors Under 1M Miles shrug off the effects of sequestration and budgetary dysfunction. We forecast status quo for the remainder of the year. Sleeper Tractors Retail $4, $35, $3, Price Mileage Retail sales data submitted by dealers and OEM s to NADA shows that the average price paid for a sleeper tractor in il was $51,391. This is the second month in a row to set a 5+ year record high. This result is $599 (or 1.2%) higher than ch s, and $1694 (or 3.3%) higher than last il (see Average Retail Price and Mileage graph).

2 Jan-1 Jan-11 Jun Aug Oct Dec Commercial Truck Guide Update (continued ) Commercial Truck Guidelines June 213 Mileage was slightly higher than last month, at 529,183. This figure is 4483 (or.8%) higher than ch s, but 18,91 (or 3.3%) lower than last il. After a high point of 557,364 in y of 212, average mileage has been trending downwards. As for age, il s average was 78. This figure is right in line with recent months 1 month older than ch, and 4 months older than last il. Age was therefore not a factor in il s record pricing. The last two months in particular have seen a notable decrease in mileage mix, mainly due to an increasing number of 29 and 21 model year trucks entering the marketplace. These trucks are now 4-5 years old, the age at which fleets typically trade them in. This factor likely explains their increased availability. Pricing has remained strong for these model years, indicating that demand continues to outweigh supply. See the Retail Sales Volume by Model Year and Retail Selling Price by Model Year graphs for detail. Sleeper Tractors Wholesale il s wholesale data depicted a break from the relentless trend of cheaper, older, higher-mileage trucks seen in recent months. Specifically, the average sleeper tractor in the wholesale market in il sold for $29,389, had mileage of 686,38, and was 86 months old. Compared to last month, il s results were $5658 (or 19.3%) higher on price, 56,977 (or 7.7%) lower on mileage, and 7 months (or 7.5%) younger. Year-over-year, il 213 s results were $122 (or 3.9%) lower on price, 45,328 (or 6.6%) higher on mileage, and 5 months (or 5.8%) older. See Average Wholesale Price graph for detail. Despite this reversal, average wholesale mileage is still substantially higher than at any time in the past five years. More than 75% of trucks sold through this channel show over 6, miles. Keep in mind, though, that macro averages can paint a misleading picture $9, $8, $7, $6, $5, $4, $3, $1, $ ly Retail Sales Volume by Model Year: Sleeper Tractors Under 1M Miles 2 per. Mov. Avg. (26) 2 per. Mov. Avg. (27) 2 per. Mov. Avg. (28) 2 per. Mov. Avg. (29) 2 per. Mov. Avg. (21) 2 per. Mov. Avg. (211) Average Retail Price by Model Year - All Sleeper Tractors Under 1M Miles $1, $45, $4, $35, $3, $25, $15, $1, $5, $ Average Wholesale Price and Mileage: All Sleeper Tractors Under 1M Miles 2 per. Mov. Avg. (Price) 2 per. Mov. Avg. (Mileage)

3 Commercial Truck Guide Update (continued ) Commercial Truck Guidelines June 213 Sales data shows that selling prices for trucks in specific mileage ranges have not changed appreciably in over a year. So the lower value of the market as a whole is driven by additional higher-mileage trucks contributing to the overall average, not a devaluation of individual trucks. In other words, even though there are more higher-mileage trucks sold at auction than a year ago, an individual truck is still worth about the same. See the Percentage of Sleeper Tractors Sold and Average Wholesale Selling Price by Mileage Range graphs for detail. 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% % Percentage of Sleeper Tractors Sold with Over 6, Miles: Retail vs. Wholesale 2 per. Mov. Avg. (Retail) 2 per. Mov. Avg. (Wholesale) $ Jun Aug Oct Dec $5, $45, $4, $35, $3, $25, $15, $1, $5, Average Wholesale Selling Price by Mileage Range (Sleeper Tractors) 2 per. Mov. Avg. (5-599K) 2 per. Mov. Avg. (6-699K) 2 per. Mov. Avg. (7-799K) 2 per. Mov. Avg. (8-899K) Special Study: Model vs. Model Retail Pricing Regular readers of GuideLines know that we always provide updates on the macro value of the retail market. That data just scratches the surface of what ATD/NADA maintains behind the scenes. In this issue, we provide a look at some of the more granular data that we use to set the values published in our products. The Retail Selling Price of Selected Models graphs show the moving 3-month average selling price for 3-6 year-old sleeper tractors by model, adjusted for mileage. Specs have been pruned to include only those trucks with large-bore vendor or larger OEM engines (this means no ISM s, ISX 11.9 s, C13 s, D11 s, or MP7 s). Results have been split into 3 graphs for ease of reading. Avg. Retail Selling Price of Selected Models Avg. Retail Selling Price of Selected Models $8, $8, $7, $7, $6, $6, $5, $5, $4, $4, $3, $1, $ 3 per. Mov. Avg. (Cascadia) 3 per. Mov. Avg. (ProStar) 3 per. Mov. Avg. (386) 3 per. Mov. Avg. (VNL 73/78) $3, $1, $ 3 per. Mov. Avg. (T66/6) 3 per. Mov. Avg. (VNL 63/67) 3 per. Mov. Avg. (387) 3 per. Mov. Avg. (T2) Dec Oct Aug Jun Dec Oct Aug Jun 3

4 Commercial Truck Guide Update (continued ) From the first two graphs, you can see that the top tier of pricing is represented by the Freightliner Cascadia, Volvo VNL 73/78, and Peterbilt 386. The Kenworth T66 made a comeback of sorts in late 212 to join that group as well. These models are generally considered to feature good fuel economy, current technology, and freedom from engine-related issues. The 73/78 is not necessarily a leader in fuel economy, but its typically high level of content and large sleeper area are positives for buyers in a specific segment of the market. The second tier is roughly represented by trucks averaging Commercial Truck Guidelines June 213 around the $5, mark, including the Kenworth T2, Peterbilt 387, and Volvo VNL 63/67. These trucks are generally considered reliable and proven. The T2 and 387 have been out of production for multiple model years, which can potentially negatively impact selling prices. In addition, their wide cabs are excellent for driver comfort, but do not necessarily provide marketleading fuel economy. The Freightliner Century Class and Columbia and Mack CX returned the lowest selling prices on average, although they have come back in the past two quarters to bring their average closer to the rest of the group. Mack has traditionally been known as much for vocational, construction, and local delivery daycabs as for sleepers, so the CX s performance is impressive for this segment. As for the Freightliners, the main factor here is the inclusion of the Mercedes MBE4 engine in the mix. Trucks equipped with available Cummins or Detroit engines typically bring more money than those equipped with the Mercedes, so eliminating that variable would positively impact the averages. Keep in mind that values published in ATD/NADA products provide adds and deducts for these engines, so our base values position the Century and Columbia more competitively than what is shown in the graph. The wild card in this analysis is the International ProStar. Selling prices for MaxxForce-equipped trucks are literally all over the map, and this factor seems to have somewhat illogically spilled over to pricing for ISX-equipped models as well. That said, there are a select few dealers who appear to be selling ProStars at competitive prices. However, there are also many dealers who are not. It is likely that the market is still establishing a comfort level with this model, and we will continue to investigate other potential causes of this dealer vs. dealer disparity. In the meantime, the averages shown reflect data we have received. Medium Duty Cabovers and Conventionals After a promising first quarter, il s wholesale results show a mild decrease in wholesale pricing for our sample population of Class 4-6 Conventionals. Volume was down as well. See Average Wholesale Selling Price 4-7 Year Old Conventionals graph for detail. $8, $7, $6, $5, $4, $3, $1, $ Avg. Retail Selling Price of Selected Models Jun Aug Oct 3 per. Mov. Avg. (CX) 3 per. Mov. Avg. (Century) 3 per. Mov. Avg. (Columbia) Dec 4

5 Commercial Truck Guide Update (continued ) Commercial Truck Guidelines June 213 Specifically, compared to ch, Class 4 was down $538 (or 3.8%), Class 5 was down $978 (or 5.4%), and Class 6 was down $924 (or 5.7%). Compared to last il, Class 4 was down $99 (or 6.2%), Class 5 was down $853 (or 4.7%), and Class 6 was down a notable $4433 (or 22.4%). All classes were down substantially in volume vs. ch. The biggest hit was in Class 6, with a 54.6% decrease month-overmonth. However, this figure is compared to an unusually strong ch. Tough month-over-month comparisons were true for Classes 4 and 5 as well. If ch is taken out of the picture, il s volume was comparable to other recent months. As for Cabovers, aside from a high outlier in tember of last year followed by a low outlier in ember, pricing has not changed notably since January, 212. Volume has been relatively steady since the 3 rd quarter of last year, when the number of trucks sold decreased from previous months. Steady pricing on lower volume suggests that segment is not yet in recovery. See Average Wholesale Selling Price: 4-7 Year Old Cabovers graph for detail. $25, $15, $1, $5, $ $18, $16, $14, $12, $1, $8, $6, Average Wholesale Selling Price: 4-7 Year-Old Conventionals by GVW Class Sources: ATD/NADA and AuctionNet 2 per. Mov. Avg. (Class 4) 2 per. Mov. Avg. (Class 5) 2 per. Mov. Avg. (Class 6) Jun Aug Oct Dec Average Wholesale Selling Price: 4-7 Year-Old Class 3-4 Cabovers With all these vehicles exposed to (and participating in) a wide variety of economic segments, it is difficult to explain monthly changes in price. However, one possible explanation for il s lower pricing for Conventionals is that dealers and end users focused on purchasing trucks in the first quarter, in advance of the Spring building and contracting season. As for volume, cyclical fleet trades could be one reason for the recent uptick. Sales Volume il s retail sales per dealership were identical to ch s, at 6.3 trucks per rooftop. This result is down.3 (or 4.5%) from last il. 212 s 12-month average was 6. trucks per rooftop, and 213 to date is 6.2. See Average Number of Used Trucks Sold graph for detail. $4, $2, Sources: ATD/NADA and AuctionNet $ Jun Aug Oct Dec Average Number of Used Trucks Sold per Rooftop (NADA Reporting Dealers) Retail 4 Wholesale Jan-9 Jan-1 Jan-11 5

6 Commercial Truck Guide Update (continued ) On the wholesale side, 213 is seeing notable increases in number of trucks sold (see Total Wholesale Sales graph). il built on ch s healthy increase to come in at 3879 a 62 (or 16.%) increase. Year-over-year, il was 652 (or 16.8%) higher. il s result pushed the year-to-date monthly average to 3248, compared to 212 s average of We attribute the increase to the aforementioned shift of Class 8 trucks with over 6, miles into the wholesale channels, as well as higher numbers of medium duty trucks and vans sold. Conclusion Going forward, we expect Class 8 retail pricing to remain strong. Commercial Truck Guidelines June 213 Increased numbers of 29 and 21 model year trucks coming off lease should provide the market with some of the lowermileage iron it demands, although not in the numbers necessary to push pricing downward notably. The auction channel seems to be absorbing the influx of higher-mileage trucks without a negative micro impact on pricing, and we will monitor this channel closely for any change. New truck orders are in their 3 rd quarter of relative strength, still not reflecting expansion, but notably higher than same-period 212. In general, economic fundamentals remain strong enough to support mild positive movement in most measures. The housing market and consumer spending are two critical factors that have come on-line in recent months. The economy continues to shrug off the political dysfunction that has resulted in budgetary uncertainty. Sequestration has so far turned out to be less of a factor at a macro level than feared, and we do not forecast a major shift in fundamentals based on that variable. As always, keep up with our Commercial Vehicle Blog for real-time updates at Total Wholesale Sales Reported to NADA 21 Total: 42, Total: 29, Total: 34,275 Jan-11 Jan-1 6

7 Average Price Average Price Commercial Truck Guidelines June 213 Fuel Price Data Regular Grade Gasoline Prices (all formulations) $3.9 Average Price Per Gallon $3.8 $3.7 $3.6 $3.5 $3.4 $3.3 $3.2 $3.1 $3. $ YoY Change $.4 $.3 $.2 $.1 $. ($.1) ($.2) ($.3) ($.4) Price Change Source: EIA On-Highway Diesel Fuel Prices $4.2 Average Price Per Gallon $ YoY Change $.4 $4.1 $.3 $4. $.2 $3.9 $3.8 $.1 $. Price Change $3.7 ($.1) $3.6 ($.2) $3.5 ($.3) Source: EIA U.S Regular Gasoline Prices (dollars per gallon, all formulations) Change From Ago Year Ago US $3.62 $3.57 $3.73 $.5 ($.12) East Coast $3.48 $3.54 $3.67 ($.5) ($.19) Midwest $3.73 $3.54 $3.65 $.19 $.9 Gulf Coast $3.36 $3.38 $3.52 ($.2) ($.17) Rocky Mountain $3.61 $3.5 $3.76 $.11 ($.14) West Coast $3.91 $3.88 $4.22 $.3 ($.31) Source: EIA U.S On-Highway Diesel Fuel Prices (dollars per gallon) Change From Ago Year Ago US $3.87 $3.93 $3.98 ($.6) ($.11) East Coast $3.87 $3.96 $4.3 ($.1) ($.16) Midwest $3.91 $3.91 $3.88 ($.) $.3 Gulf Coast $3.76 $3.84 $3.89 ($.9) ($.13) Rocky Mountain $3.83 $3.87 $4. ($.4) ($.16) West Coast $3.97 $4.5 $4.25 ($.8) ($.28) 7

8 Home Price Index (Aggregate Jan. 2=1) All Items (% Change) Retail and Food Service Sales (% Change) Diffusion index, SA Change in Nonfarm Payrolls (ly, Ths.) Index Value Commercial Truck Guidelines June 213 Economic Data Employment Total Nonfarm Payrolls & Unemployment Rate, SA Consumer Confidence Index 8 Nonfarm Payroll Change Unemployment Rate Unemployment Rate (%) Source: BLS Source: The Conference Board Retail Sales Retail & Food Service Sales, SA Industrial Production Purchasing Manager's & Inventories Indices 15% Retail/Food Service Sales YoY Retail/Food Service Sales MoM 65 Purchasing Manager's Index Inventories Index 1% % 5 % % 35-1% % 2 Source: U.S. The BLS Conference Census Bureau Board Source: Institute for Supply Management Housing S&P/Case-Shiller Home Price Index (2-Metro Composite) & Housing Starts (Total Private) Consumer Price Index (CPI) All Items 25 Home Price Index Housing Starts 2,5 6% All Items YoY All Items MoM 5% 2 2, 4% ,5 1, Housing Starts (Ths. SAAR) 3% 2% 1% % 5 5-1% -2% -3% Source: S&P Case-Shiller, U.S. Census Bureau Source: U.S. Bureau of Labor Statistics 8

9 ATD/NADA Official Commercial Truck Guide Value Trends Commercial Truck Guidelines June 213 ly Change in ATD/NADA Commercial Truck Guide Value 213 v. June 213 NADA Segment 27MY 28MY 29MY 21MY 211MY* Commercial Van -2.7% -2.4% -3.3% -4.5% -4.1% Extended Hood.%.%.%.%.% Highway Aerodynamic.% -.4% -.3% -1.% -2.4% Highway Traditional.%.%.%.%.% Local/Delivery Daycab.%.% -.1% -1.1%.% Medium Duty Cabover -3.4% -2.1% -4.% -4.7% N/A Medium Duty Conventional -6.3% -5.6% -2.1% -2.2% -1.1% Vocational/Construction.%.%.%.%.% *Value movement can be influenced by newly valued vehicles. See the last page of "Guidelines" for data key. Annual Change in ATD/NADA Commercial Truck Guide Value June, 212 v. 213 YoY Segment NADA Segment 5YR 4YR 3YR 2YR Change Commercial Van 3.7% -26.8% 5.3% 4.4% -2.6% Extended Hood 12.8% -2.8% -.4% 5.8% 3.8% Highway Aerodynamic 21.4% -3.5% -6.% -7.2% 1.% Highway Traditional 9.% -2.5% 2.% 4.1% 6.3% Local/Delivery Daycab 12.8% -4.3% -6.8% 1.8% -3.6% Medium Duty Cabover 6.9% -15.2% 7.% N/A -1.2% Medium Duty Conventional -7.5% -.5% -2.3% -.1% -2.4% Vocational/Construction 3.8% 1.4% 14.6% N/A 28.3% *Calculations are based on vehicle age, i.e. values for 1 year old vehicles in CY212 are compared against values for 1 year old vehicles in CY211. YTD Change in ATD/NADA Commercial Truck Guide Value January June 213 YTD Segment NADA Segment 26MY 27MY 28MY 29MY 21MY* Change Commercial Van -6.5% -11.8% -14.% -1.2% -9.% -7.9% Extended Hood.6% -3.1% -5.5% -7.2% -4.5% -4.% Highway Aerodynamic -7.1% -1.6% -9.% -14.8% -15.8% -9.2% Highway Traditional.% -4.8% -5.6% -6.7% -5.% -4.2% Local/Delivery Daycab -6.6% -9.3% -11.4% -12.% -13.5% -9.3% Medium Duty Cabover -2.1% -4.8% -5.6% -11.2% -12.1% -1.6% Medium Duty Conventional -19.8% -25.7% -24.7% -11.3% -6.7% -15.3% Vocational/Construction.% 1.5% -1.1% -2.3% N/A 5.% 9

10 Commercial Truck Guidelines June 213 At NADA Used Car Guide What s New Coming soon! Android device users will soon be able to download and subscribe to NADA ket- Values. NADA ketvalues is our new mobile app designed exclusively for dealers. Subscriptions are available for NADA Used Car Guide values and/or AuctionNet, the industry s top source for wholesale vehicle sales data. NADA values include weekly NADA auction values, as well as monthly trade-in, loan and retail for used passenger cars and light-duty trucks. Download NADA ketvalues from the Apple Store for $1.99 and get your FREE 3 day trial started today! Contact us at to learn more. On the Road Join us at the 213 LSCU Convention & Exposition from June 12 th - 15 th in Orlando, FL. Stop by Booth #86 where Doug Ott will be available to demonstrate our product offerings and answer questions. If you are at the NIADA Convention & Expo from June th in Las Vegas, NV, be sure to join Mike Stanton as he presents the National Quality Dealer Award. Jim Dodd will be at Booth #43 to demonstrate our newest product, NADA ketvalues. Ask about the NIADA member special promotions for NADA AppraisalPRO and NADA ketvalues. We will also be at the NAFCU 46 th Annual Conference And Solutions Expo in Boston, MA from y 9 th through the 13 th. Doug Ott will be at Booth #1213 to demonstrate our product offerings and answer questions. About NADA Used Car Guide Celebrating our 8 th year, NADA Used Car Guide has earned its reputation as the leading provider of vehicle valuation products, services and information to businesses throughout the U.S. and worldwide. NADA s editorial team collects and analyzes over one million combined wholesale and retail automotiverelated transaction prices per month. Its guidebooks, auction data, analysis, and data solutions offer automotive, financial, insurance, and government professionals the timely information and reliable solutions they need to make better business decisions. Visit to learn more. About AuctionNet AuctionNet is an industry-unique wholesale transaction database, available exclusively from NADA Used Car Guide, in joint partnership with the National Auto Auction Association (NAAA). Over 1 million records strong and updated weekly, it captures sales from all Manheim and ADESA, as well as participating ABC, ServNet and large independent auctions, representing over 8% of nationwide auction activity. CONTACTS: Financial Industry/ Accounting/ Legal/OEM Captive Steve Stafford x7275 sstafford@nada.org Credit Unions, Fleet/Lease/ Rental Industry, Government Doug Ott x471 dott@nada.org Automotive Dealers/Auctions, Insurance Jim Dodd x7115 jdodd@nada.org Automotive OEMs Stu Zalud x4636 szalud@nada.org Business Development Manager Jim Gibson x7136 jgibson@nada.org Director Sales and Customer Service Dan Ruddy x477 druddy@nada.org Director Public Relations Charles Cyrill (mobile) ccyrill@nada.org Disclaimer: NADA Used Car Guide makes no representations about future performance or results based on the data and the contents available in this report ("Guidelines"). Guidelines is provided for informational purposes only and is provided AS IS without warranty or guarantee of any kind. By accessing Guidelines via or the NADA website, you agree not to reprint, reproduce, or distribute Guidelines without the express written permission of NADA Used Car Guide.