Class 8 Order Market Frozen by Weak Supply Chain

While there is demand for new trucks, OEMs continue to be limited in what they can produce due to shortages of semiconductors and other components.

North American Class 8 net orders stayed steady at about 21,400 units in January. The total was down 8% month over month, and down 50% year over year.

January orders continued to track in a restricted range with the total for the month equaling the average of the last four months. OEMs continue to match order rates to build rates as they manage backlogs monthly. OEMs are not entering all their 2022 commitments because they do not want to overbook due to the uncertain supply chain, FTR officials said in a press release.

 “January orders met expectations. As a group, the OEMs are entering orders at the same rate as production. Backlogs have tracked in a narrow range for the last ten months, which is odd in this cyclical industry. Normally, this would indicate a very stable market. In this case, it reflects a market frozen by a weak supply chain,” Don Ake, vice president of commercial vehicles for FTR, said.

Class 8 orders have totaled 343,000 units over the last twelve months, which would equate to a robust production year.

Kenny Vieth, ACT Research’s president and senior analyst, said:  “For Class 8, with backlogs stretching through 2022 and still no clear visibility on the easing of the everything shortage, January’s net order haul reflects the ongoing conservative approach by OEMs looking to limit the risk of overbooking and underbuilding that plagued the industry in 2021.”

“The big negative to the January order volume is that it indicates the supply chain has not improved yet from the end of last year,” Ake said. “OEMs are not confident they can get parts, so they limit the number of orders they enter. Order totals will rise as soon as supply chain conditions improve.”