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NADA: Trucking Reaches ‘Critical Mass’ of Sleeper Tractor Inventory

November 16, 2015 By: Trucking News Staff Tags: Fleet Management, News, Owner Operators

In its November commercial truck guidelines report, NADA Used Car Guide analysts focused their monthly report on explaining the pricing devaluation that it said occurred August through October in the commercial sleeper tractor market.

According to the findings of the report, the devaluation can be attributed to fleets returning large numbers of three- to five-year-old trades, increased no-reserve auction activity, and a decreased need for freight activity.

Market devaluation analysis in the report also points out:

  • Auction pricing up to 30 percent lower for some models since August.
  • Retail pricing has not been impacted to same degree.
  • The freight environment suggests no change in conditions through the first quarter of 2016.

When asked about the developments in the commercial truck market, Chris Visser, senior analyst at NADA Official Commercial Truck Guide, said, “It appears the ‘critical mass’ of sleeper tractor inventory was reached mid-year.

“Unfortunately, until the economy works its way through the excess inventory of goods, freight demand will remain at current levels. We expect pricing conditions to remain consistent until the second quarter,” Visser said.

“Given the vast majority of fleets are on a three- to five-year trade cycle, and knowing the build rate of 2011 through 2013 model year trucks, we have a feel for what kind of volume to expect going forward. Whereas a three- to five-year-old truck in 2014 was represented by the 2010 – 2012 model years, that same cohort in 2015 is represented by the 2011 – 2013 model years,” Visser said.

“This change represents a 27.3 percent increase in the number of trucks of typical trade-in age in 2015. In 2016, we can expect another 13.2 percent increase on top of that.”

NADA said the models sold new in greatest numbers are the ones most heavily affected by the returning supply. As of early November, the most notable impact to pricing is still through the auction channels. Retail pricing for the stronger of these models has not yet been impacted to the same degree. Other models have also seen a less drastic devaluation in wholesale and retail channels.