New Truck Orders Remain Down In North America


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NEW YORK -- As expected, class 5 to 8 new truck orders remain weak in North America. Builds are down 35 percent in April from the same period last year, which at this time was experiencing the height of the pre-buy, spurred by customers looking to buy equipment in advance of new, more expensive EPA-mandated engines in 2007.

Weakness was driven by Volvo (down 82% y/y), then Freightliner (down 43% y/y). Navistar, (down 36% y/y), and Paccar (down 33% y/y).

According to transportation market experts at Bear Stearns in New York, class 8 orders were reported at 10,491 IN April, down 65 percent from last year.

Export orders accounted for 33 percent of net new orders in April (vs. 36% of net new orders in March). To put those numbers in context, exports were only 11 percent of net new orders in 2006.

Meanwhile, medium duty, class 5-7 orders -- considered by the firm to be a "purer" measure of economically derived demand -- were down 40 percent from last year.

The lower sales aren't having much an affect on the OEMs stock performances, however.

"We believe that the market is in a 'pre-buying the pre-buy,'" says Bear Stearns' latest truck sales report. "We think investors are disregarding weakness in the U.S. truck cycle and buying the 'emissions cycle,' and want to own these stocks early for the next pre-buy in the U.S.

On that note, Bear Stearns is standing firm on past predictions that the current 2007 downturn is deeper and will last longer than most industry insides originally expected.


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