Medium Buys Drop 5.9% for '07

Light & Medium Truck, Mar 2008 by Reiskin, Jonathan S

Combined medium-duty truck sales declined by 5.9% during 2007, although for the year's final month, the falloff was only 2.6% for vehicles in Classes 3-7.

WardsAuto.com's Jan. 11 survey showed that, in general, the lighter the gross-vehicle-weight rating class, the better original equipment manufacturers did with their U.S. retail sales.

Throughout 2007, spokesmen for OEMs said medium-duty truck buyers did not binge on purchasing in 2006, as did heavyduty fleets. With less 2006 pre-buy, last year's decline was largely attributed to a softer economy, rather than a reaction to the change in emission regulations.

For the year 2007, OEMs sold 386,024 medium-duty trucks, compared witii me 410,417 Classes 3-7 units tiiey moved in 2006.

As for December, truck makers sold 36,631 units to U.S. buyers, compared with 37,614 at the end of 2006.

Annual sales volumes in Classes 6 and 7 had the greatest declines, witii each class dropping more man 20%, relative to 2006.

Class 7 declined by 22.4% to 70,426 units for the year, from 90,792 vehicles in 2006. Daimler Trucks North America overtook International Truck and Engine Corp. for the marketshare lead in this group.

Daimler's three North American Class 7 brands - Freightliner, Sterling and Mitsubishi Fuso - controlled 37.6% of the market in 2007, up from 32.6% the year before.

In contrast, International's share in 2007 fell to 28.4% from 35.4% the year before.

Total Class 6 sales fell by 23.2% to 53,789 units last year from 70,029 units in 2006. However, International maintained its market-share lead here.

International's Class 6 share in 2007 declined to 33.4% from 40.3% in 2006. Its main rival, Ford Motor Co., increased to 26.6% from 22.5%; and Daimler's same three brands rose to 25.9% from 22%.

Class 5 results were closest to the medium-duty sector as a whole, dropping 9.2% for the year to 44,922 vehicles, from 49,466. Ford's annual market share dipped to 50.4% from 52.2% in 2006.

For the month, Class 5 finished the year with much softer results, dropping by 21.5% to 4,019 vehicles sold, compared with 5,121 in December 2006.

Class 4 showed the least movement among the mediumduty classes, adding 1.4% to annual volume, and 0.3% to December's results, relative to December 2006. Ford boosted its Class 4 share to 55.6% in 2007 from 41% the year before.

Class 3 performed the best, growing by 10.7% for the year and by 37.7% in December. Ford had 48.9% of this market in calendar 2007 and 70.7% in 2006.

General Motors Corp. reported a gain in sales of more than tenfold, selling 33,507 Class 3s in 2007, up from 2,578 in calendar year 2006.

Auto Analysts Visit Detroit

DETROIT - For research analyst David Lynch, the Detroit auto show provides an opportunity to study the people behind the cars instead of just raw financial data.

"I try to get a sense of tone from the executives, a sense of where they see things going beyond the formal presentations," said Lynch, of MFC Global Investment Management LLC in Boston, in an interview on the floor of the North American International Auto Show. "Sometimes it's even about body language."

As many as 700 investors and analysts were in Detroit in January to pepper chief financial officers, product development czars and marketing chiefs with questions about their plans for the year. Many said seeing the new cars, experiencing the atmosphere of the show and assessing the mood of participants is at least as important as any technical or financial information.

One morning, they fanned out across the Cobo Conference & Exhibition Center and, like an army of Consumer Reports technicians, opened car doors and slammed them shut, kicked tires, wiggled gear shifters and tugged on seat cushions. At Acura's stand, a pair of analysts took turns snapping photos of each other flashing a thumbs-up in front of the MDX sport utility vehicle.

The show, featuring 700 models from more than 20 carmakers, gives Schneider Capital Management analyst Christopher Gillespie a chance to compare General Motors Corp.'s Chevrolet Silverado pickup truck to the 2009 Ford F-150 pickup. The two are the best-selling vehicles in the United States.

"I don't have a favorite model yet," said Gillespie, who helps oversee about $5 billion in Schneider Capital's portfolio. "It looks like they invested plenty into the Ford, though."

"It's going to be a very interesting year for pickups, especially with what's supposed to be this downturn in sales," he said.

U.S. sales of cars and light trucks may fall by as much as 400,000 units this year over 2007, when sales declined 2.5%, according to Ford and GM economists at the show. Last year's 16.1 million vehicles sold was the lowest total since 1998.

That may put further pressure on U.S. automakers, which collectively lost 0.9% of their share of the world's biggest market last year as Japanese automakers, including Toyota Motor Corp., increased their share. - Bloomberg News