Speaking in a phone interview, General Manager Nick Panza said the truck maker will take advantage of order cancellations to clean its new truck order backlog this month.
But he did not predict a slowing of production, layoffs or even shorter overtime working in the production area. Production at the company's Denton, TX., and Nashville, TN., plants will continue to run at current levels with minor changes of one or two units per day.
Construction remains strong, said Panza, even though there has been some slowing in housing. Other vocations also remain strong, maintaining a healthy order situation for the company overall. New truck orders for major fleets have not been significantly impacted to this point by the fuel or interest rate hikes, though Panza did say that some smaller fleets and owner-operators have deferred purchasing decisions.
Helping Peterbilt’s position is the success of the new model 387, which already has a backlog of several thousand, he said. Star Transport, one of Peterbilt’s biggest fleet customers has an order for 700 trucks and is extremely pleased with the early deliveries of the 387.
Panza is still predicting North American Class 8 sales of between 230,000 and 250,000 this year. But he was less certain about next year. On the one hand there is the looming prospect of the 2002 engines change for the next emission levels which many are predicting will lead to a pre-buy. On the other, there’s the significant number of used trucks still in the market that will impact new sales, he said. The market could go as low as 200,000 or be as high as 250,000, he said. Finding drivers and impacts of the proposed Hours of Service regulations were factors that are as yet unknown.
There is no consensus on the impact of the hours proposal from either Peterbilt or its customers. There has been some discussion it could mean more trucks, but there were issues of urban congestion and air quality that also had to be considered.
Panza was guarded over the "Black Box" issue, saying that safety was a primary concern but he didn’t think electronic recorders were necessarily the technology to guarantee safety gains.
Medium-duty sales have seen a little softening in the last 30 days, but overall, Panza says class 6 and 7 will remain healthy, in part driven by some of the e-commerce activity in distribution. He said that the Model 330 conventional is well positioned in the medium market and he is optimistic that the new cabover medium model 270, just now coming on stream, will do well in urban situations.
On used trucks, Panza said Peterbilt dealers were better positioned than some other nameplates as Peterbilts have traditionally enjoyed a higher value than other makes. However, he admitted the whole market is down so while the margin is still there, the value has taken a hit along with the used market in general. Even so, said Panza, Peterbilt dealers were better able to cope with any risk because of the higher retained values in his company’s products.