Class 5-7 retail sales were off 54% from May 2008, but continued low production output has reduced inventory levels to a 41-month low. However, the inventory-to-sales ratio (IN/RS) in the medium-duty market is now at seven months, more than double normal levels. The trend is similar in the Class 8 market, where retail sales fell 52% from May 2008, but the IN/RS ratio is only 3.4 months.
“Although the low inventory is a positive,” said Steve Tam, ACT vice-president-Commercial Vehicle Sector, “at current depressed sales levels, the Classes 5-7 market will have to improve significantly to justify ramping up production.”
According to ACT's recently released State of the Industry: Classes 5-8 Vehicles report, Class 8 net orders were soft in all three North American markets, but most pronounced in Mexico. When Mexico is combined with other export markets, net orders were off 89% from May 2008.
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