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Second Quarter Shows Fleets Optimistic, Yet Shy

While fleets did show some optimism about their business and their intentions to buy new equipment in the second quarter, many are still going the cautious route and aren't trying to get cocky yet, according to CK Commercial Vehicle Research's second quarter Fleet Sentiment Report.

The report's Buying Index, which measures the percent of fleets planning to purchase power units and/or trailers in the next three months, was up 18.4 percent from the first quarter. The index found that 33.3 percent of fleets plan to place orders for new power units, while 29.8 percent plan new trailer purchases in the next three months. However, this percent is still below the four-quarter moving average and well below the same quarter last year, according to the research.

While the numbers are improving, 50 percent of those fleets that do not plan to purchase in the second quarter said they don't expect to place their next order for over a year. Thirty-four percent of those don't plan to place an order for 10 to 12 months.

"Most industry forecasters are expecting soft demand for power units the remainder of 2010 and the answers here reflect that," the report said. "There is even a strong indication that many fleets won't buy until mid-2011."

In addition, those that are planning purchases of power units are not doing so to add capacity. Only one respondent indicated that it will add capacity, while the rest are buying for replacement demand.

The report did find that a greater number of for-hire fleets are planning to buy power units, at 63 percent. "This is a change from recent past quarters where private fleets were showing stronger inclination to purchase power units," the report said.

The percentage of fleets who plan to buy trailers in the second quarter is 19 percent higher than the first quarter and above the four-quarter moving average. Two of the three largest fleets in the group expect to purchase trailers in the next three months. However, the fleets not expecting to add trailers in the near term are not planning to order them any time soon, with most expecting their next order to be at least mid-2011.

Overall, when fleets were asked "how's business?" there was a 15 percent improvement over the first quarter, and the best results since the third quarter 2008, when the researchers started asking the question. On a scale of one to five, five being excellent, 55 percent said business was at a four or five.

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