August Big Truck Sales Down 23% Over Last Year - Major Supplier Accuride Takes Drastic Action

Implications: A major industry supplier is back in trouble - and is an indicator of things to come. Accuride CEO John Murphy has resigned after 11 months at the helm. It shows how one plans for swings and also shows the importance of parts and service sales in smoothing them out.

Analysis: August new truck sales numbers are coming in less than some had hoped - and the outlook keeps softening for a variety of reasons. While August numbers in Class 8 were up for Daimler’s Freightliner, Navistar and Volvo’s Mack Division; YTD sales for all Class 8 are down almost 23% over 2007. Only Navistar Class 8 numbers are up (2%) YTD primarily due to their Prostar model being available just this year compared to poor sales last year. All other truck-makers and classes 4-8 are down, both monthly and YTD.

Accuride Corp companies include a major wheel supplier (90% of new steel wheels), wheel end parts (brake hubs, drums, rotors, etc.), truck body parts, seats, axles and other components. Accuride went through a turnaround after the 2000 swing and has done well over the last several years because of the dramatic sales of new trucks. Fast forward to today and they are back in trouble.

Part of the reason is obvious (sales), but another can be seen in one of the announcements - they named a new VP of Aftermarket. I can speak as a buyer of their products - in that they don’t have an aftermarket market or presence. We tried to buy some products from them - and it was impossible. They are also looking at moving more wheel manufacturing from Canada to Mexico - where they claim they have more business today anyway.

Others have been through this previously and they took action. Cummins now corporately has half ownership of most of their formerly independently-owned distributors, which has bolstered their aftermarket profits. Caterpillar parts sales are always a big plus. Paccar has long tied down parts sales to smooth out cycles, which can be seen in their quarterly consistent profitability. Freightliner has all the service points at TA Truckstops. It’s that old razor / razor-blade approach that Accuride is thinking about - again.