Deutsche Bank reports that Class 8 truck orders for July were 9100 units, up 8.8% from June’s 8360. June’s 8360 was up 16.5% from the May low of 7176. The last of the EPA07 Truck orders will drive incremental production increases in Q4 2009 and Q1 2010 according to their global markets research report.
Deutsche Bank’s forecast for industy sales of Class 8 trucks is 90,000 for 2009; 125,000 for 2010. That’s the good news.
The downside is that the USEPA’s Heavy-Duty Highway Diesel Program Rules required new engines will increase costs.
“The introduction of new engines in 2010 may impact fuel economy, routine vehicle maintenance, and operational costs,” according to the ATA website.
Not to mention anticipated increase of cost of the new compliant class 8 engines: “Class 8 engine costs are expected to increase substantially in beginning in 2010 much like they did in 2007.” (Source : ATA website , emphasis ours.)
” Navistar said that its exhaust gas recirculation technology will increase International truck prices by up to $8,000 for the 2010 model year. Depending on the specific engine model a truck uses, prices will be $6,000 or $8,000 higher due to compliance with the Environmental Protection Agency’s emissions standards, which go into effect January 1.” Source: Transport Topics
Inferences for the precision machining industry- the US Heavy Truck Market is on the mend, and thanks to the rules already on the books, we can expect yet another round of cost increases for freight to bring us our raw materials and to ship our products to our customers. For those of us making parts for this new generation of engines, this is good news, but it’s inflationary effects will be felt by us all.
How do we spell inflation?