Volvo Trucks North America (VTNA) foresees a continuing strong truck market as fleets rush to buy in advance of costly EPA27 emissions standards.
Magnus Koeck, vice-president, marketing and brand management with Volvo, gave a market update to truck journalists at the company’s Virginia-based Customer Center this week. Looking back at 2023, the overall truck market was strong in the U.S. and Canada.
Magnus Koeck updates the trucking media at Volvo’s Customer Center in Virginia. (Photo: James Menzies)
Retail sales in Canada totaled 30,222 units, and Volvo built 11.8% of those. Its U.S./Canada market share slipped to 10.2%, which Koeck attributed to ongoing supply chain challenges and component shortages, as well as a United Auto Workers strike that affected one of its plants. It also lost its leading position in Class 8 electric truck sales due to a broad battery-related recall.
But there was also a lot to like about the past year, Koeck added. Its customer satisfaction improved to record levels based on its net promoter score (a survey of customers) and the quality of product churned out of its New River Valley plant was its best ever, Koeck added.
Looking ahead to 2024, Koeck said a recession is unlikely, with Canada/U.S. GDP growth expected to come in at 1.1%, weaker in Canada than in the U.S.
“We will have a soft landing,” he said.
The freight market will likely remain soft early this year, but Koeck feels it has bottomed and that spot market rates will improve from here. Volvo is forecasting a Canada/U.S. Class 8 truck market of 270,00 units this year, down from 297,000 in 2023. But as he looks ahead to 2026, Koeck is predicting a record year as fleets buy units ahead of the 2027 emissions regulations that will undoubtedly add costs to new trucks.
Based on past pre-buys, Koeck feels customers will begin ramping up orders even earlier to lock in build slots.
“We truly believe customers will not wait until 2026 to buy units because they realize if they wait that long, the industry won’t be able to supply [enough] trucks,” Koeck said. “Which means, the pre-buy will start earlier. We probably will see that already this year in the back end and into 2025 and of course 2026.”
Even with weaker sales of 270,000 units forecast this year, Koeck said that “is still a very, very good market. Paired with a general improvement in the economy, I think we have some very, very good years [ahead]. What is going to happen after 2026 is another story. 2027 will be a big dip due to the new emissions legislation, and with that comes quite dramatic increases in the pricing of the trucks.”
Volvo is prepared for the strong years ahead with an all-new VNL highway tractor rolled out in January and set to enter production in the third quarter. Koeck said Volvo plans to grow its market share, improve its service offerings and continue executing on its sustainability strategy, including electric trucks.
