Effective today, we are withdrawing coverage of ETN. As the company continues to diversify away from the Auto & Truck components supply chain through electrical acquisitions, its applicability to the rest of our coverage is declining.
NA vehicle production dropped to an 11.6M SAAR from 13.0M in 3Q, but Europe likely accelerated to about an 18.8M SAAR from 18.5M in 3Q (incl. Russia). China production continued to set records with a 21.0M 4Q SAAR, up from 18.1M in 3Q. Declines in Japan and S. Korea SAARs in 4Q left the global production SAAR about flat from 3Q.
Yesterday morning, ACT Research reported preliminary net orders of Class 8 trucks of 25,500 for December. This was down just 3% from 26,268 in November, and we estimate December Class 8 orders ran at a Seasonally Adjusted Annual Rate (SAAR) of almost 300K, with the trailing 3- and 6-month SAARs rising to 272K and 222K.
The 12.6M U.S. light vehicle sales Seasonally Adjusted Annual Rate (SAAR) in Dec was the highest monthly SAAR since 8/08 ex-clunkers. U.S. light vehicle sales finished C10 at 11.6M units, up 11% from 10.4M in C09.
Embedded in our prior below-consensus thesis was a very slow growth environment, but with an improving economy and stimulative policy we are more optimistic about sector prospects for C11. In this note, we introduce our C12 EPS ests, discuss key themes likely to drive the stocks in C11 and our views on the domestic and global vehicle production outlook.
Yesterday, ACT Research reported preliminary net orders of Class 8 trucks of 26,300 for November. This was the highest Class 8 truck order month since May 2006, and we estimate November Class 8 orders ran at a Seasonally Adjusted Annual Rate (SAAR) of over 300K, with the trailing 3- and 6-month SAARs rising to 240K and 204K.
The 12.3M U.S. light vehicle sales Seasonally Adjusted Annual Rate (SAAR) in Nov was in line with Oct and remains the highest monthly SAAR since 9/08 excluding cash for clunkers in 8/09 and raised the YTD SAAR to 11.5M units. Unadjusted sales of 873K dropped 8% sequentially.
The 12.3M U.S. light vehicle sales Seasonally Adjusted Annual Rate (SAAR) in Oct was the highest monthly SAAR since 9/08 excluding cash for clunkers in 8/09 and raised the YTD SAAR to 11.4M units. Unadjusted sales of 950K dropped 1% sequentially.
Yesterday, ACT Research reported preliminary net orders of Class 8 trucks of 18,700 for September, up 23% sequentially each of the last two months, in line with an historical avg sequential increase of 22%. We estimate October Class 8 orders ran at a Seasonally Adjusted Annual Rate (SAAR) of about 203K, up modestly from a 200K SAAR in Sept but the trailing 3- and 6-month avg SAARs of 188K and 178K are also helpful given the volatility in monthly order data.
Last week we met with 11 public and private Truck Equipment, Truckload and LTL companies at the ATA conference in Phoenix. The sector was generally upbeat with production and TL margins recovering since freight is up and rate increases have outpaced cost increases this year. Truckers’ main concerns are cost increases from driver pay, truck prices, new regulations and maintenance on older trucks.