New registrations remain 45.4% lower than the historic peak in 2006, when the market boomed to support the impending change in diesel regulations. The 2011 recovery is being led by a large increase in registrations of Class 3 vehicles rather than GVW 8 vehicles, which have historically been the predominant segment in the commercial vehicle market.
"The growth in the Class 3 segment is predominantly based on those vehicles being purchased for small to large fleets and independent contractor use," said Gary Meteer, director, sales and client services, at Polk. "Some of these vehicles are likely to have mixed use for commercial business during the week and family activities on the weekend, such as for trailering recreational vehicles," he continued.
The best indication of this mixed use, according to Polk, is the fact that through the first eight months of the 2011, nearly 48% of Class 3 vehicles were registered to an individual, rather than a business. New registrations to individuals were up 27.4% in the first eight months of the calendar year versus 24.3% for all vehicles among all Class 3-8 vehicles.
The southern region of the U.S. has the largest concentration of new commercial vehicle registrations and has remained relatively flat this year with 2010 volumes in the same timeframe, with approximately one third market share. After the record level of new registrations in the 2006 calendar year, new registrations fell sharply in the central region. However, the central region has led the industry's recovery with an uptick in its share of new commercial vehicle registrations to well above historical levels, jumping from 21.4% of the market in 2007 to more than 29% through the first eight months of 2011.
Used Market Also Rising
Through June of this year, strong demand for clean used commercial vehicles has resulted in the replacement of older models and the lowering of the average age of the commercial vehicle population. As an example, in 2009, 49.5% of the commercial vehicle population represented vehicles that were model year 1999 or older. By the middle of this year, just 44.8% of vehicles were older than model year 1999. The availability of clean used equipment is prompting many smaller companies interested in cost savings and operational efficiencies to replace their much older commercial vehicles with newer ones.
Small Fleets Rise More than 30 %
Small commercial fleets representing 1-5 units are up 23.3% during the first eight months of 2011, and represented 32.6% of new commercial vehicle registrations. Conversely, large fleets reported a 19.5% increase since last year. While larger fleets are the mainstay of new commercial vehicle registrations, it is significant that owners of smaller fleets are optimistic about their business prospects and purchasing new vehicles over used models, which is traditional small business owner behavior.
The largest category of new commercial vehicle registrations for 2011 is with leasing and rental companies, with a 21.4% share, versus a 17.2% share during the comparable period last year. The second largest segment of buyers is individuals, representing 20.2% of all new vehicle registrations, down slightly from 21% last year.
Diesel Dominates; Ford Gaining Share
Diesel remains the fuel of choice for commercial vehicle owners, and Ford has put forth conscious marketing efforts for its proprietary diesel engine, introduced in spring 2010, and well received by Ford Super Duty owners, according to Polk analysis. Since bringing the engine to market, Ford has steadily grown share and is currently in a tie with longstanding industry leaders International/Navistar for second in the diesel engine segment, behind Cummins.
For more information, please visit www.polk.com.