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September 2020 medium and heavy commercial-vehicle registrations

13 November 2020

September 2020 US medium & heavy commercial-vehicle registrations extend recovery

Registrations of new medium and heavy (GVW 4-8) commercial vehicles in the United States topped 43,100 units in September 2020, virtually unchanged from August, according to the latest data released this week by IHS Markit and made available in this week's Truck Industry Profile (TIPNet) update. Compared to the same month of the prior year, new registrations in September remained down year over year; however, the small pace of decline, -7% y/y, was visibly improved from the double-digit pace of decline in preceding months. The result made September the third strongest month in 2020 and further cemented the recovery that started after new-truck demand hit bottom in April 2020.

The aggregated data masked pockets of true strength, for which there was support even in the pandemic environment. New registrations of GVW 4-8 buses and motor homes rose 9% y/y in the month, showing the first gain on a combined basis since before the pandemic. Among trucks and chassis, GVW 5 extended its stellar performance, with a 36% y/y gain in the month, helped by increased e-commerce business and last-mile delivery nationally, among other factors. Meanwhile, GVW 4 finished nearly flat y/y following three months of consecutive y/y gains. Finally, across nearly all weight classes and vehicle types, there was a marked y/y rise in the units registered to individuals and small fleets, of fewer than five commercial vehicles. Newly registered vehicles by these groups came in at nearly 24% up from the prior year.

"In general, the market's performance in September continued the trends evident since July and pointed to the market finishing the year on a high note, after the lows of the first half," said Andrej Divis, head of global truck research at IHS Markit.

Trends to September are a leading indicator for the new forecasts released this week by IHS Markit. These new forecasts anticipate GVW 4-8 registration volumes in the United States reaching approximately 110,000 new commercial vehicles in the fourth quarter 2020 and more than 430,000 units in the full year, for a cumulative y/y decline of 24% compared to calendar year 2019. Individual month registrations at year's end may approach parity with the prior year. IHS Markit continues to assess prospects for 2021 cautiously, however, and pegs next year's GVW 4-8 new registrations growth at below 10% y/y. Recent momentum notwithstanding, IHS Markit expects at least four factors to cause demand to pause or slow in the coming months. First is the course of the pandemic, with the United States having hit new single-day records for new COVID-19 cases recently. Some localities and states are beginning to re-introduce restrictions on economic activity, which if extended and continued, could impact the quantity or timing of trucking freight. While the forecast does not explicitly assume a broad second lockdown phase, it does make an allowance for the possibility and err on the conservative side. Second, the wave of re-stocking by US businesses has been rapid and has supported demand for trucks into fall, but the fast pace of recovery may also signal an early end to the re-stocking cycle and lessen some of the urgency around new-truck purchases. Third, the chances for a new federal stimulus package in the new year appear to be fading, with implications for consumer spending, goods restocking and freight, and support for state and local governments. Finally, as the pandemic wanes, perhaps as a vaccine gradually becomes available next year, consumers are likely to re-balance their spending away from goods to services, further easing demand for freight movements, again further reducing the need for new truck buys.

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