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Medium-Duty Sales in June Slide 18.8%


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Transport Topics  /  July 15, 2020

U.S. retail sales of Classes 4-7 medium-duty trucks in June dropped 18.8% to just under 18,000 units, WardsAuto.com reported, with long slides down in the two heaviest segments and a small combined step up for the lowest two.

Sales fell to 17,515 compared with 21,574 a year earlier.

Sales for the first six months were down 18.6% to 99,281 compared with 121,991 in the 2019 period.

Class 7 sales were 3,798, down 25.9% compared with 5,123 a year earlier. Freightliner was the sales leader. International was second. They were separated by 479 trucks, and their combined sales accounted for 68.2% of the total sales in Class 7.

Class 6 sales plunged 46.7% to 3,575 compared with 6,711 in the 2019 period. International edged out Freightliner 966-956 for the top spot. Four other brands sold a combined 1,653 trucks in the class.

Classes 4-5 sales inched up 4.1% to 10,142 compared with 9,740 a year earlier.

“Classes 4-5 continue to outperform expectations,” said one analyst. “Our current call is for this segment to drop about 30% [in 2020]. For the larger medium-duty vehicles, we are looking for Classes 6-7 to fall about 35%, with similar expectations for the whole of the Classes 4-7 market.”

He said things are progressing as expected for Classes 6-7.

“This continues to be largely a lease-rental and private-fleet story, with capital budgets being cut, leading to below replacement demand,” he said. “Same for government and municipal markets, whose tax revenues are suffering mightily.”

He added, “Honestly, there is no magic between classes. All of the configurations that go on these chassis are scalable. So a small beverage-delivery truck could be a Class 6, but it could also be a Class 5 or a Class 7.

“Just change the length of the frame rails and either add to or take away from suspension slash weight carrying capacity, and it is what you want it to be. Perhaps Class 6 is a just a good middle ground from which to move up or down.”

In related news, Mack Trucks, a unit of Sweden's Volvo Group, announced serial production of its MD Series of Classes 6-7 trucks was rescheduled to Sept. 1 from July 1. Mack invested $13 million in a new manufacturing facility in Virginia’s Roanoke Valley.

“The start was delayed as a result of the coronavirus pandemic,” a spokesman said.

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Absolutely right, there "is no magic between classes".  But, these new heavier class 5's like the Ford F-600 and Chevy 6500 are going to take significant sales from traditional class 6 trucks.  The have comparable GVW's in most cases, too much power if anything, and are cheaper and easier to handle.  

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A lot of the choices between classes 4-8 are driven by DOT and IRS regulations- Stay under 33,000 and you don't have to pay FET, stay under 26,000 and the driver doesn't need a CDL, stay under 19,500 and you can tow a trailer without the IRS calling the truck a "tractor" and demanding FET. Farther down the weight classes if you stay over 6000 pounds and buy a pickup with a 6' or longer bed, cargo van, or mini-bus for your business you can take a 179 accelerated tax write off. 

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50 minutes ago, Maxidyne said:

A lot of the choices between classes 4-8 are driven by DOT and IRS regulations- Stay under 33,000 and you don't have to pay FET, stay under 26,000 and the driver doesn't need a CDL, stay under 19,500 and you can tow a trailer without the IRS calling the truck a "tractor" and demanding FET. Farther down the weight classes if you stay over 6000 pounds and buy a pickup with a 6' or longer bed, cargo van, or mini-bus for your business you can take a 179 accelerated tax write off. 

However, if your under 19,500 truck pulls a large trailer, welcome to a new world of regulation.

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Tax laws can be ridiculously arbitrary- Buy a 33,000 pound GVW plus truck that can handle the load and you get hit with a tax, overload an under 33,000 truck and all you have to worry about is the scales. At the other end of the truck spectrum, I've been shopping for a new vehicle to use in my small scale farming operation- I'd like a 2200 pound payload between truck and trailer so I can buy bulk supplies by the ton, and at least a 2000 pound trailer tow rating so I can haul my tractor to jobs, and a 3500 pound rating would be even better. The Transit Connect van will will do the job nicely, though I'd have to put some of the heavier implements in the van to meet the little van's 2000 pound tow rating. Heck, the Ford Escape SUV even has a 3500 pound tow rating and gets mid 20s MPG. But to get the accelerated "179" expense deduction I have to buy at least a Ranger long bed or a big Transit to get a GVW rating over 6000 pounds, even though I don't need that much truck!

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