We recently wrote about how Mack and Volvo Group suspended truck production due to COVID-19 fears, now it appears that other truck builders are following in their footsteps. Recently, Paccar and Navistar International announced that they are also halting production. Both have announced two-week shutdowns, with a Paccar representative saying, “[we] will continue to provide aftermarket support to its customers who deliver essential infrastructure services to our communities.”
Demand for Used Trucks Stays Steady
In a way, the coronavirus epidemic could not have come at a greater time for Navistar, Paccar, and other trucking manufacturers in the United States. TopMark Funding predicted that the production of new big rigs would stall, though not to this extent.
Used trucks are one of the ways logistics companies are cutting costs in 2020. In 2019, 24,000 trucks were put out of business and onto the market to be sold. This made things bleak for the companies that made and already sold those trucks who are now competing with their own product. After all, why buy a 2020 Navistar truck when the average vehicle loses 9% of its value the instant it is no longer new?
Because of this competition from used commercial vehicles, the manufacturers have been feeling a squeeze on its sales and margins. Taking a break from building new heavy-duty trucks and letting used ones exit the market could be a smart business decision to increase revenue later in the year. If it stops the spread of coronavirus, the shutdowns help alleviate two problems at once.
COVID-19 is rampaging across the country. As the death toll in the United States exceeds 500, businesses deemed “non-essential” are being shut down to mitigate the spread of the disease. Truck drivers can mostly breathe a sigh of relief, however, as trucking as an industry is not only an essential business to keep stores running (and in some cases the virus has helped the trucking industry), but it also is a naturally isolating profession. The odds of a trucker catching novel coronavirus is slim, and even if they did, the odds they transmit it to another is also slim. Just make sure to use gloves when handling that diesel pump!
CHECK OUT THESE OTHER GREAT TRUCKING ARTICLES
- Mack Trucks to Reenter Medium-Duty Market
- How to Grow Your Trucking Company
- Trucking in 2020 and Beyond
- Benefits of Leasing a Semi-Truck
ABOUT TOPMARK FUNDING
TopMark Funding is a top-rated semi-truck financing and equipment financing company located in Roseville, CA. We specialize in commercial trucking and heavy equipment. Our mission is to become your long-term financial partner by helping you grow your trucking business and fleet.
We’re not here for the short-term, we’re on the long-haul with you!
Learn more about: Semi-Truck Financing
Fill out the contact form or give us a call at (866) 627-6644. One of our truck financing specialists will contact you as soon as possible to go over your truck lease needs and learn more about you and your business financing goals.