The new truck market is experiencing a “correction” as fleets are moderating their truck orders in response to slower freight movement while lowered values for used trucks have caused some potential customers to hang onto theirs instead of trading them in.
However, Mack Trucks is handling both situations better than some other manufacturers, said the builder’s president, Dennis Slagle, at a briefing for reporters on Wednesday, July 20.
Although there are still “too many trucks in the pipeline” to dealers – the reason all heavy truck makers are cutting production from last year’s high levels – Mack has been able to slow production with “down weeks rather than cutbacks and layoffs,” and it managed trade-in cycles through sales contracts in recent years to avoid a glut of trade-ins. That strategy is now paying off, he said.
Also helping is parent company Volvo Group’s ownership of Arrow Truck Sales, which is reselling many traded-in vehicles that might otherwise burden Mack and Volvo dealers. Meanwhile, the economy is showing encouraging signs.
“We are seeing full employment and consumers are starting to clear off those shelves” of store merchandise piled there in anticipation of a strong Christmas shopping season that fell short, Slagle said.
That and other positive economic news are causing North American Class 8 production to clip along at a 255,000-unit pace for this year, above the 240,000 Mack predicted earlier this year but well under the 301,740 sold in 2015, he said.
Industry sales of long-haul and regional tractors are therefore down somewhat, though they still dominate overall sales, and other segments like construction, especially home building, are up, while refuse remains strong. This has given Mack – a traditionally energetic player in vocational trucks with its Granite, MR and recently introduced LR models – a second straight strong quarter.
Improvements to the Granite, including the addition of “crawler gears” to the mDrive automated manual transmission, should further boost Mack’s performance in construction, said John Walsh, vice president, global marketing and brand management. A 13-speed mDrive HD is now standard on Granite, and a 14-speed version is available; these give better startability and high-speed cruising for construction trucks. The 12-speed HD is still available, and the regular 12-speed remains standard on highway models.
The mDrive currently goes into 20% of Granites and that should rise with the new options. The mDrive goes in 30% of Titans, while 80% of Pinnacle axle-back and 60% of Pinnacle axle-forward tractors get the AMT, Walsh said.
Mack has improved the service experience for customers at its dealers, who have succeeded in cutting in half the industry’s average 4.5-day waiting time for a 3.5-hour truck repair, he said. This is partly due to better staffing at dealers. Technician staffing is up by 98% and Mack Master Technician numbers are up by 340%. Dealers now have 6,430 technicians and 1,872 of them have been awarded master status.
This is part of Mack’s Certified Uptime program, where dealers improve staffing, processes and facilities to quickly fix trucks and get them back on the road, Slagle said. Thirty-nine dealer locations are now certified and 60 should be by year’s end. The eventual goal is for all 430 locations to be certified.