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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, 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

                            Coronavirus Update

                            Jun 6, 2022 - Demand for Trucks Outstrips Supply
                            • Demand for new trucks is exceeding the industry’s ability to build them. Production of trailer-hauling heavy-duty trucks is constrained by parts shortages that can’t keep pace with a long backlog of orders, preventing fleets from replacing and adding trucks when demand for shipping consumer goods and industrial materials is surging, industry executives told The Wall Street Journal. The limited availability of new trucks is due to a scarcity of parts, including semiconductor chips, that caused truck manufacturers to cancel orders in late 2021 for several thousand vehicles they weren’t able to build, the WSJ reported. As of May 2022, manufacturers accepted about 55% fewer orders than during the early months of 2021, according to market forecaster ACT Research. ACT is forecasting production of heavy-duty trucks to increase to 296,000 this year, down from an estimate of 300,000 at the start of the year.
                            • Strong hiring by manufacturers drove strong US job growth in April. The US manufacturing sector added 55,000 jobs for the month, a one-month net job change second only to leisure and hospitality. Government economists said the majority of manufacturers’ gains came from hiring at durable goods plants. Machinery makers added 7,400 jobs and businesses that produce transportation equipment added 13,700 jobs. The latest figures show manufacturers pumping the breaks on wage increases. After increasing by 15 cents an hour between February and March, the average hourly wage in manufacturing rose only half that—7 cents—between March and April. It is now $24.78 an hour.
                            • Drivers of diesel-powered heavy-duty trucks are facing sky high fuel prices when they fill up their tanks. More than 97% of all US Class 8 (tractor-trailer size) trucks run on diesel fuel, according to Fuel Oil News. The average on-highway diesel fuel price per gallon jumped nearly 35 cents in late April, to a new record of $5.509, up $2.367 from a year ago, according to the US Department of Energy (DOE). Truckers in California and the Northeast are seeing prices in excess of $6 per gallon. The average price for a gallon of diesel rose in all regions, according to the DOE’s weekly fuel-price information published May 2, with the weekly jump reaching as high as 49.2 cents on the East Coast. The highest average price was in California, at $6.412, although the weekly jump there, of 13.5 cents per gallon, was the smallest reported.
                            • Heavy duty truck manufacturers are likely to benefit from the federal Trucking Action Plan (TAP) because driver shortages can negatively impact demand for trucks. In early April, government leaders announced that within the first 90 days of 2022 technical assistance and $58 million in funds were provided to states through TAP in efforts to more than double the number of new commercial driver’s licenses (CDL) issued. Over 100 firms, including UPS and Frito-Lay, launched Registered Apprenticeship programs, which are expected to lead to over 10,000 apprentice drivers. The TAP program also includes outreach to veterans as recruits for new drivers. According to the Biden Administration, over 876,000 CDLs were issued in the first 90 days of this year.
                            • Firms are trying to balance backlogs with supply shortages. Preliminary North American Class 8 truck net orders decreased about 28% in April 2022 from the prior month and about 56% year-over-year, according to estimates from FTR and ACT Research. Manufacturers are matching order rates to build rates, so they don’t overbook production. As a result, customers are experiencing extended lead times. The lower order total in March is not due to any lack of demand for new equipment but to uncertainty in the supply chain, FTR officials said. The backlog of orders stretches through 2022 with no sign of easing. Hampered production and movement of semiconductor and other components are due to ongoing fluctuations in staffing levels at manufacturers, distributors, and ports.
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