ACT Research: Commercial Vehicle Cancellations Spike, Despite Continued Rock-Solid Demand

According to ACT Research’s (ACT) latest State of the Industry: NA Classes 5-8 Report, with the exception of a month here and there, Class 8 cancellations have been at non-event levels since the month after the pandemic started, at about a 5.7% order cancellation rate since April 2020. However, October and November data tell a new and different story.

ACT’s State of the Industry: NA Classes 5-8 report provides a monthly look at the current production, sales, and general state of the on-road heavy and medium duty commercial vehicle markets in North America. It differentiates market indicators by Class 5, Classes 6-7 chassis and Class 8 trucks and tractors, detailing measures such as backlog, build, inventory, new orders, cancellations, net orders, and retail sales. Additionally, Class 5 and Classes 6-7 are segmented by trucks, buses, RVs, and step van configurations, while Class 8 is segmented by trucks and tractors with and without sleeper cabs. This report includes a six-month industry build plan, backlog timing analysis, historical data from 1996 to the present in spreadsheet format, and a ready-to-use graph package. A first-look at preliminary net orders is also published in conjunction with this report.

ACT Research: Commercial Vehicle Cancellations Spike, Despite Continued Rock-Solid DemandAccording to Kenny Vieth, ACT Research’s President and Senior Analyst, “Between this month’s cancellations and the restatement of October’s volume, we have to go all the way back to Q3 1995 to find a month, or two, to rival current cancellation volumes.” He added, “In November, cancellations jumped to a second-highest ever 18,874 units. October’s cancellation volume was restated to 16,938 units. Order cancellation rates for the two months rise to 42% and 66%, respectively, and as a percentage of the Class 8 backlog, November’s cancellations were 7.1%.”

Vieth continued, “In addition to Class 8, medium-duty cancellation rates were also higher this month, with the cancellation volumes rising to a 13-plus year high 4,545 units. With still strong new order intake, the cancellation rate jumped to 19-month high 16.5%.”

ACT Research: Commercial Vehicle Cancellations Spike, Despite Continued Rock-Solid DemandData aside, he was quick to note, “We believe that it is essential to highlight that unlike previous periods of elevated cancellation activity, this massive spike in cancellations was driven not by customers saying, ‘I don’t need that truck’, but rather by the OEMs who have been unable to build and deliver backlogged orders in a timely fashion.” Vieth concluded, “Because of the everything shortage that has plagued industry production since early in the year, considerable volumes of planned 2021 units have had to be cancelled and rebooked as new model year units scheduled to be built in 2022. Again, we reiterate, these are not cancellations driven by flagging new vehicle demand, which remains rock-solid.”

ACT Research is recognized as the leading publisher of commercial vehicle truck, trailer, and bus industry data, market analysis and forecasts for the North America and China markets. ACT’s analytical services are used by all major North American truck and trailer manufacturers and their suppliers, as well as banking and investment companies. ACT Research is a contributor to the Blue Chip Economic Indicators and a member of the Wall Street Journal Economic Forecast Panel. ACT Research executives have received peer recognition, including election to the Board of Directors of the National Association for Business Economics, appointment as Consulting Economist to the National Private Truck Council, and the Lawrence R. Klein Award for Blue Chip Economic Indicators’ Most Accurate Economic Forecast over a four-year period. ACT Research senior staff members have earned accolades including Chicago Federal Reserve Automotive Outlook Symposium Best Overall Forecast, Wall Street Journal Top Economic Outlook, and USA Today Top 10 Economic Forecasters. More information can be found at www.actresearch.net.

ACT’s 66th Seminar is scheduled for February 22-24, 2022. Focused on the continuous evolution and advancement of autonomous and powertrain technologies in the transportation and commercial vehicle markets, OUTLOOK Seminar 66 will feature key industry leaders from Ford, Transplace, TuSimple, and the EPA, with more being added to the agenda. February’s event features three panels (US Economics, Trucker & Transportation, and Autonomous Ecosystem), as well as a fireside chat with the EPA, discussions about fleet decarbonization, electric vehicle forecasts, and reviews of freight/transportation, Class 8, Classes 5-7, the US used truck and new US trailer markets. For information about OUTLOOK Seminar 66, click here

ACT’s commercial electric vehicle study, Charging Forward: 2020-2024 BEV & FCEV Forecast & Analysis, was published on March 31, 2021, after months of extensive research. Utilizing industry expertise and analysis, as well as the input from a comprehensive list of key industry study participants, ACT Research has developed a critical guide for battery electric and fuel cell electric unit build and sales forecasts over the next two decades. With coverage of Classes 4-8 commercial vehicles, ACT has identified 14 market subsegments and more than 20 application types; this one-of-a-kind report is a must-have for those investing or investigating electric power opportunities. To learn more or to purchase this report, click here

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