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

                            Nov 10, 2022 - Refrigerated Fleets Under Pressure to Meet Zero-Emissions
                            • Some refrigerated straight-truck (those with a fixed trailer) fleets operating in California must convert at least 15% of their trucks to electric transport refrigeration units by the end of 2023 or face sanctions, which can include grounding the entire fleet, HDT reported in November. The California Air Resources Board developed the transport refrigeration unit (TRU) fleet compliance schedule to address toxic and harmful emissions from diesel-powered TRUs. The most significant part of the California rule requires operators of vans and straight trucks to turn over at least 15% of their fleet to zero-emissions refrigeration systems each year for the next seven years. The deadline for the transition is Dec. 31, 2023. And fleets will need to continue to turn over part of their fleet each year until they reach 100% zero emissions by 2029.
                            • Truck freight volume – an indicator of demand for heavy duty trucks – fell 2.6% in Q3 2022 compared to the previous quarter and 4.9% year-over-year, according to the third quarter 2022 US Bank Freight Payment Index (FPI) released in November. The decline in truck freight volume in Q3 was the steepest quarterly drop in shipments since the first three months of 2021, according to the report, which also revealed that spending by shippers declined in the third quarter. “Lower freight volumes, as well as dropping diesel prices in the quarter, led to the linked-quarter spending contraction,” said US Bank’s director of Freight Data Solutions Bobby Holland adding, “Even with the third quarter dip, spending by shippers is still at near record levels for the history of our index.”
                            • The strength of the US dollar relative to the euro, Japanese yen, British pound, and other currencies is giving foreign manufacturers a price advantage in the US market while making US exports more expensive, The Wall Street Journal reported in October. The unfavorable exchange rates threaten to derail the rebound in US manufacturing, especially for companies with large overseas sales. Diesel-engine maker Cummins told WSJ it expects the strong dollar to reduce its 2022 sales by 2% to 3% and decrease operating profit by about 1%. But exchange rates cut both ways: The currency shift is helping some US manufacturers that import foreign-made components for use in their US factories.
                            • A shortage of truck drivers amid strong demand for freight drove up wages in 2021, with average compensation approaching $70,000, according to the American Trucking Associations’ annual survey. Tractor trailer drivers were among those paid about $69,700 last year, up 11% from the previous year, as companies boosted wages, bonuses and benefits to attract drivers. The rise in truck-driver pay is triggering higher transportation costs for companies as truckers seek to pass along their higher expenses, contributing to inflation across the US economy that is running near a four-decade high, The Wall Street Journal reported. The pay raise appears to be paying in the form of reduced turnover for large truckload and less-than-truckload fleets late last year, according to the American Trucking Associations.
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