Market Outlook customers would prefer.
Wrinkle: Fleets are keeping equipment in service longer due to extended lead times. While most utility body manufacturers have inventory available, the challenge lies in sourcing appropriate chassis, especially for more complex configurations. The more specialized the equipment arrangement, the harder it becomes to obtain a suitable chassis. To address these issues, companies are adopting innovative approaches, for example, using trucks in order to receive refurbished bodies removed from older equipment.
Are fleets planning to
Q: pre-buy trucks and equipment in advance of upcoming engine emissions standards?
Caywood: Every time we go through an emissions change there are challenges. Some customers that have the capital and budget are hedging their bets, but across the board we are not seeing significant pre-buying.
Bistritz: The change in engine emissions standards will impact the cost of trucks and upfitted equipment. To the extent that fleet customers can mitigate or avoid that price impact as long as possible is something many fleet customers want to consider so pre-buying is an option.
Wrinkle: Fleets are planning to pre-buy trucks and equipment ahead of upcoming engine emissions standards. However, quantifying this trend is challenging due to existing backlogs and the long-range planning typically associated with these specialized vehicles.
Lieberum: Data shows that prior to major changes in past regulations it is sometimes possible to see a small bump in sales of affected units. However, sales quickly returned to normal levels within a short time of any of those prior regulation changes, so we don’ t expect major impacts.
Are OEM allocation plans
Q: for trucks and chassis impacting purchasing activity?
Bistritz: Forecasting for and having available manufacturing capacity to meet the needs of the market remains a challenge for most OEMs. Allocation will almost always impact purchasing activity.
Caywood: This was one of the biggest constraints over the last few years and all customers felt the impact. Additionally, we are all working to understand the various implications of state or California Air Resources Board( CARB) Advanced Clean Fleets regulations, so we continue to work with chassis OEMs and dealers as we navigate through these new rules.
Wrinkle: OEM allocations are impacting purchase activity by restricting supply. Dealers prioritize sales to local end users and that can create pent up demand or provide a path for competitive sales.
What is your outlook for
Q: the truck and equipment market in these segments?
Wrinkle: The utility market remains robust, with a significant backlog for trucks, particularly those with more complex utility bodies. Inventory is limited but available utility products are quickly being consumed. As OEMs move away from allocation, the market is poised to become more competitive. The market is likely to rebound in spring 2025 and remain strong through 2026.
Caywood: Macroeconomic drivers, overall load growth and planned grid improvements support a positive market outlook for manufacturers.
Lieberum: The utility industry, like construction and related industries, generally moves in step with the overall economy. Given the number of large infrastructure projects and billions invested in building out new energy sources, the demand for trucks is expected to remain strong.
Utility truck demand is being driven by long term planning to support contracts for infrastructure maintenance or construction, pointed out Tim Wrinkle, Senior Product Manager, Mack Trucks.
Bistritz: Market dynamics indicate high demand for utility services. We continue to work with customers on how to best find solutions that help them satisfy their fleet needs.
November-December 2024 l 25