Polk: New Vehicle Market Bleak in '09; Used Shows Promise

The newest Polk Commercial Vehicle Solutions report paints a bleak picture of the commercial vehicle market in 2009, with the number of new commercial vehicle registrations for Classes 3-8 down 36.8 percent from 2008 to 312,400 units.

This is the lowest total in a single year since Polk started keeping records in 1985. But as fleets clearly stopped buying new in 2009, they made up for it in buying used trucks, a market which experienced a boost of 20.3 percent in registrations over 2008.

A Downward Spiral

In its December edition of the Commercial Vehicle Market Intelligence Report, Polk found that new registrations for Class 3-8 vehicles started off at 32,100 units in January 2009 and hovered at around 25,000 units per month for the following nine months.

However, during the last two months of 2009, new registrations got down to 22,900 units and 22,000 units in November and December, respectively. These were the lowest monthly levels recorded since 1985. Last year started out on a bad note with new registrations down 36.3 percent from January 2008 and ended the year on an even worse note, with December figures down 37.4 percent from December 2008. And we thought the beginning of 2009 was bad. In fact, January of last year was the only month to exceed 30,000 units for new registrations.

All segments within the commercial market saw a drop from 2008, with the largest declines in Class 4 at 49.4 percent and Class 6 at 46.3 percent. New commercial vehicle registrations for Class 8 were 95,500 in '09, down 32.6 percent from a year ago.

During the last quarter of 2009, new vehicle registrations fell 34.2 percent from the same quarter of 2008 to a level of 71,300 units.

And these numbers are worse than Polk had expected. When looking at the researchers' predictions as of September, they had overstated the final numbers of new vehicle registrations for 2009 by 9,000 units, or 3.2 percent.

New trailer registrations were also down for the 2009 calendar year, slipping 52.6 percent from 2008.

Canada was even worse off in 2009, with new vehicle registrations decreasing 39.8 percent from 2008 levels to a total of 44,550 units. This is the same level Polk forecasted in the September report.

Light at the End of the Tunnel

Despite the bleak figures that characterized the new vehicle market in 2009, the used truck market was able to see some uptick, Polk reported. The used market saw a 20.3 percent improvement in registrations over 2008, with registrations totaling 552,000 units versus 459,000 in 2008.

In the fourth quarter of 2009, used commercial vehicle registrations were up 6.8 percent from the year-ago period to 110,250 units. The level of used truck activity during the last three months of 2009 represented 60.7 percent of commercial vehicle transactions during the quarter, compared to 48.8 percent during the 2008 quarter.

According to Polk, this increase in share can be attributed to the declines in new commercial vehicle registrations, not to a boost in demand for used trucks. In fact, the largest gains for the used segment were in Classes 4 and 8, markets that had some of the largest declines in new vehicle registrations. "This is an indication of an abundance of clean used equipment that is available at a good value," the Polk report said.

In the report, Polk suggests that the best picture of the overall health of the commercial vehicle market can be achieved by looking at both new and used registrations together, not just side by side. And these numbers seem to lessen the blow. For the fourth quarter of 2009, combined new and used registrations were down 14.2 percent from the 2008 quarter. On a combined basis, registrations fell 9.3 percent in 2009 compared to 2008.