Market Trends of North America Used Truck Industry
This section covers the major market trends shaping the North America Used Truck Market according to our research experts:
Heavy Duty Trucks will Lead the Market
The construction industry in North America is expected to witness significant growth in the coming years, with good opportunities emerging from the infrastructure, residential, and non-residential sectors. The advent of trucks with higher power and advanced features, like airbag occupancy sensors, air conditioning, cruise control systems, ABS and driveline traction control, and electronic stability, makes them one of the preferred choices for material handling and transportation in the construction and manufacturing sector.
However, purchasing new trucks is a major investment for the construction companies, especially in short-term projects, as it is more suitable to lease heavy-duty trucks since they help in avoiding major start-up costs. In North America, numerous construction equipment users are seeing rented heavy-duty trucks or opt for the 'pay-as-use' model as an optimal way to do business. This model has been proven more beneficial for the used heavy-duty trucks market, thereby increasing the demand for used heavy-duty trucks.
After the COVID-19 pandemic, buyers were more inclined to buy used trucks as compared to new trucks, which created a huge demand last year. Owing to this, various major players added new dealerships to provide more options and after-sales services to customers. For instance, in September 2020, the Gordon Truck Centers added a new Freightliner Northwest store in Albany. The location will provide parts, services, and service support for Freightliner and Western Star.
Moreover, to support social distancing, some companies motivated buyers to select their vehicles from the website and made their websites more informative to customers. For instance, in April 2020, Penske rolled out the new and improved version of its website. The upgraded version includes an enhanced online experience featuring a responsive, adaptive design that makes shopping, buying, and financing a used truck online convenient.
The United States is Expected to Hold the Largest Share in the Market
The United States is the largest market for used trucks in the North American region. The US trucking industry is poised to experience strong growth over the next decade as the country's economy is slated to be steady, despite the signs of an upcoming recession. Nearly 70% of all freight transportation is done by trucks. On average, over 3.6 million heavy-duty Class 8 truck (heavy-duty trucks with a gross vehicle weight rating of greater than 33,001 pounds) movements are required to move the freight volume the country needs to handle per year.
However, due to COVID-19, commercial truck sales in 2020 reached near to 410,000 units, with a decline of 22.3% from the 2019 total. In that, sales of Class 8 trucks in 2020 totaled nearly 192,000 units, which was down by 30.6% from 2019. This has led to an increase in demand for used trucks, which has forced truck dealers to increase their used trucks fleet.
Moreover, with the growth of online retailers, digital logistics operations, and e-commerce companies such as Amazon, Fresh Direct, and Instacart and lowering of oil and gasoline prices, many major carriers across the country are expanding their fleets by purchasing used trucks at a lower price to increase their profit margins.
Moreover, the used truck prices are expected to increase with the entry of the latest model years trucks into the used truck segment in the next 1-2 years. The total nationwide fleet of trucks is probably about as big as it needs to be able to handle the current demand for freight. Hence, the leasing of trucks is expected to increase as truck operators have sufficient options to choose from in the used trucks market, according to the freight movement demand.
