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American Truck Dealers Host Economic Roundtable Discussion at ATD Show
VEGAS (March 22, 2018) – The American Truck Dealers (ATD) today hosted an
Industry Roundtable, sponsored by Ally Financial, at the ATD Show in Las Vegas.
Five industry analysts representing the commercial-truck industry provided an
economic update, discussed market trends and projections for 2018 and beyond.
are the key highlights from the five panelists:
/ National Automobile Dealers Association
commercial-truck dealers ended 2017 with total dealership sales up
significantly from 2016, and 2018 is poised to be even better. In 2017, total
sales on average at truck dealerships was $43 million, an increase of 13.6%
from 2016. In the fixed-operations department, truck dealers also saw gains in
sales. Service and parts sales on average at dealerships totaled $14 million,
an increase of 13%. ATD’s outlook for truck dealerships in 2018 and beyond is
positive. Tailwinds stemming from the passage of new tax legislation, high
levels of business and consumer confidence and higher profitability point to a
strong year for new-truck sales and service this year.
‘perfect storm’ of positive economic developments is setting the stage for a
solid 2018 for the economy, a strong year for transportation, and a favorable
top- and bottom-line operating environment for truck dealers. The momentum
should carry over into 2019. Business and consumer confidence is on the
rise, lower corporate tax rates and more favorable rules on equipment
depreciation are in place, interest rates are still low by historic standards,
and the economic vigor that we see is not confined to North America but
witnessed worldwide. There are risks – if the Federal Reserve hikes interest
rates too quickly, or if Trump administration tariffs and trade policy
boomerangs, perhaps even escalating into a full-blown trade war – these could
lead to intensified headwinds. But the ‘most-likely’ scenario is that 2018-2019
could have the strongest performance of this expansion cycle, now nearly nine
Classes 5-7 commercial vehicle market booked its eight year of consecutive
growth in 2017. By virtue of their direct participation in virtually every
facet of the US economy, medium-duty vehicles enjoy stable, sustainable growth,
contrasting them to their larger, trailer-toting brothers. Conspicuously absent
are the massive peaks and devastating cliffs typically associated with the
Class 8 market. While questions surround two of the largest end markets,
automotive manufacturing and construction, medium-duty truck demand show no
signs of abating in 2018.
& Senior Analyst
strong economic underpinnings and growth in key freight generating economic
sectors, demand for trucking services are set for a run that is expected to
extend into 2019. Tax cuts are adding fuel to an already warm fire.
Simultaneously, already low unemployment, demographic headwinds, and the
roll-out of the electronic logging device mandate are constraining the supply
of truck drivers and the industry’s capacity to deliver freight. At the
confluence of these two trends is carrier profitability. Profits, the key
driver of Class 8 market cycles, are expected to soar in 2018 and be well
positioned for carryover strength into 2019. Strong trends in freight and
trucker profitability have U.S. Class 8 orders on a tear, leading us to the
inevitable questions, how high and how long?
President Sales and Marketing
Economic Activity (TEA), MacKay and Company’s measure of economic truck
activity, was strong through 2017 with investment, exports and imports all
posting gains over the past year. Government sectors lagged in 2017. Currently,
MacKay and Co. estimate that the medium- and heavy-duty parts aftermarket
totals about $30 billion at retail and anticipates nearly 3% growth over the
next few years. Truck dealers enjoy a large portion of the aftermarket: 55% for
traditional products and hard parts; and nearly 80% for more
electronically-based parts like sensors, ECMs and DPF-related parts.
ATD Show runs concurrently with the National Automobile Dealers Association
(NADA) Show from March 22-25 in Las Vegas.
founded in 1970, is a division of NADA and represents more than 1,800 medium-
and heavy-duty truck dealerships.