Heavy Duty Truck Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 70 heavy duty truck manufacturers in the US produce heavy-duty trucks; heavy duty truck, tractor, and bus chassis; buses; and firefighting vehicles. Additional product categories include replacement parts and other types of trucks. Firms may also offer financing and leasing programs to support purchases.

Sensitivity to Freight Volume and Economic Conditions

The heavy duty truck market is cyclical and highly sensitive to global and national economic conditions.

Government Regulation

Environmental and safety regulations have forced heavy duty truck manufacturers to make substantial changes to their vehicles.

Industry size & Structure

The average heavy duty truck manufacturer employs between 300 and 400 workers and generates about $370 million annually.

    • The heavy duty truck manufacturing industry consists of 70 firms that employ more than 25,000 workers and generate over $25 billion annually.
    • The industry is highly concentrated; the top 4 companies account for more than 70% of industry revenue.
    • Large firms, including Navistar (TRATON Group) and PACCAR, may have operations and sell products in foreign countries.
    • In early 2022, Freightliner had a 40.1% market share of Class 8 trucks, Kenworth had a 14.6%, Peterbilt 14.3%, International 11.6%, Volvo 10.4%, and Mack 5.8%, according to Wards Intelligence.
    • Firms that generate $100 million annually account for 23% of firms and 97% of industry revenue.
    • In 2020, there were 3.97 million Class 8 trucks in operation, up 1.5% from 2019, according to the American Trucking Association (ATA).
                            Industry Forecast
                            Heavy Duty Truck Manufacturers Industry Growth
                            Source: Vertical IQ and Inforum

                            Recent Developments

                            Mar 14, 2023 - Truck Tonnage Index Grows
                            • The for-hire truck tonnage index, an indicator of demand for heavy duty trucks, increased by 0.7% in January 2023 compared to the previous month, according to an index released by the American Trucking Association (ATA). The index also increased by 1% in December. Despite the recent gains, the tonnage is still off 1.4% from the recent high in September. The for-hire tonnage index increased by 1.5% year-over-year, marking the seventeenth consecutive year-over-year gain. ATA Chief Economist Bob Costello added, “Tonnage has increased nicely in the last couple of months. I suspect that some of the gain is attributable to capacity coming out of the network, especially those carriers that primarily operate in the spot market and/or bought expensive used equipment in the last couple of years. This would push more freight to contract carriers, which dominate this index.”
                            • US manufacturing activity contracted in February 2023, falling below the baseline for growth for the fourth consecutive month, according to the Institute for Supply Management’s Manufacturing ISM Report on Business. The Manufacturing PMI registered 47.7 in February, a slight change from the 47.4 recorded in January. A reading above 50% indicates manufacturing expansion. In February, the ISM’s Purchasing Managers Index (PMI) fell to 47.4%, down from 48.4% in January. February’s New Orders Index remained in the contraction zone at 47%. The February Production Index decreased slightly to 47.3%. Of the manufacturing industries tracked by the ISM, four reported growth in February: Apparel, Leather & Allied Products; Transportation Equipment; Petroleum & Coal Products; and Electrical Equipment, Appliances & Components. Fourteen sectors reported contraction, including Computer & Electronic Products, Fabricated Metal Products, Nonmetallic Mineral Products, Plastics & Rubber Products, Primary Metals, Textile Mills, and Wood Products.
                            • According to a new survey by Bloomberg Intelligence and Truckstop, freight brokers anticipate growth in 2023 despite challenges such as declining volume and rate pressures, according to Trucking Info. Nearly half of those surveyed said they expect demand growth over the next six months, compared to 45% in the first half of 2022 and 76% in the second half of 2022. More than 40% of respondents said volume increased in the second half of 2022 compared to a year ago. About 22% of brokers surveyed expect to raise contract rates with shippers in the next six months. According to Lee Klaskow, senior freight transportation and logistics analyst at Bloomberg Intelligence, "Freight brokers appear unfazed by the collapse in spot truckload rates and the effects of moderating economic activity on demand, contractual rates and gross margins. Only 12% of respondents expect gross margins to contract over the next six months."
                            • The preliminary Class 8 net truck orders in January 2023 were 18,400 units, according to ACT Research’s latest State of the Industry: NA Classes 5-8 Vehicles report. According to the report, NA Classes 5-7 net orders were 17,800 units. Per Eric Crawford, a VP and senior analyst at ACT, “Given how robust Class 8 orders were into year end, the relative pause in January is not surprising. We note that over the final four months of 2022, nearly 159k Class 8 net orders were placed, +92% y/y, and only 8% below those placed over the same period in 2020. January’s orders represent the first y/y decline in five months (August).”
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