North America Used Truck Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

North America Used Truck Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The North America used truck market was valued at USD 13 billion in 2020, and it is anticipated to reach USD 17 billion by 2026, at a CAGR of more than 4% during the forecast period (2021 - 2026).

With COVID-19 stopping every transport worldwide, the impact on the market was high in the first few months of the pandemic. As soon restrictions were eased, companies in the region witnessed a huge influx of customers looking for affordable used trucks. As auto plants were shut and consumers were more cautious about spending on new trucks, in the last few months, companies recorded more sales of used trucks.

The North America used truck market is expected to witness healthy growth during the forecast period, with the implementation of Green House Gas's phase 2.

The growth in construction activities and increasing demand for e-commerce in the region have increased the demand for trucks, both old and new, in the past few years. Further, the North America Free Trade Agreement has given the necessary impetus for the easy movement of goods in the region, thereby helping the growth of the market.

Newer trucks are now being equipped with advanced features like automatic transmission with more cabin comfort, which is driving the users to go for new trucks instead of purchasing old trucks without these features. This is hindering the market growth currently.

The construction industry in North America is expected to witness significant growth in the coming years, with good opportunities emerging from the infrastructure, residential, and non-residential sectors. The advent of trucks with higher power and advanced features, like airbag occupancy sensors, air conditioning, cruise control systems, ABS and driveline traction control, and electronic stability, makes them one of the preferred choices for material handling and transportation in the construction and manufacturing sector.

However, purchasing new trucks is a major investment for the construction companies, especially in short-term projects, as it is more suitable to lease heavy-duty trucks since they help in avoiding major start-up costs. In North America, numerous construction equipment users are seeing rented heavy-duty trucks or opt for the ‘pay-as-use’ model as an optimal way to do business. This model has been proven more beneficial for the used heavy-duty trucks market, thereby increasing the demand for used heavy-duty trucks.

After the COVID-19 pandemic, buyers were more inclined to buy used trucks as compared to new trucks, which created a huge demand last year. Owing to this, various major players added new dealerships to provide more options and after-sales services to customers. For instance, in September 2020, the Gordon Truck Centers added a new Freightliner Northwest store in Albany. The location will provide parts, services, and service support for Freightliner and Western Star.

Moreover, to support social distancing, some companies motivated buyers to select their vehicles from the website and made their websites more informative to customers. For instance, in April 2020, Penske rolled out the new and improved version of its website. The upgraded version includes an enhanced online experience featuring a responsive, adaptive design that makes shopping, buying, and financing a used truck online convenient.

United States is the largest market for used trucks in the North American region. The US trucking industry is poised to experience strong growth over the next decade as the country’s economy is slated to be steady, despite the signs of an upcoming recession. Nearly 70% of all freight transportation is done by trucks. On average, over 3.6 million heavy-duty Class 8 truck (heavy-duty trucks with a gross vehicle weight rating of greater than 33,001 pounds) movements are required to move the freight volume the country needs to handle per year.

However, due to COVID-19, commercial truck sales in 2020 reached near to 410,000 units, with a decline of 22.3% from the 2019 total. In that, sales of Class 8 trucks in 2020 totaled nearly 192,000 units, which was down by 30.6% from 2019. This has led to an increase in demand for used trucks, which has forced truck dealers to increase their used trucks fleet.

Moreover, with the growth of online retailers, digital logistics operations, and e-commerce companies such as Amazon, Fresh Direct, and Instacart and lowering of oil and gasoline prices, many major carriers across the country are expanding their fleets by purchasing used trucks at a lower price to increase their profit margins.

Moreover, the used truck prices are expected to increase with the entry of the latest model years trucks into the used truck segment in the next 1-2 years. The total nationwide fleet of trucks is probably about as big as it needs to be able to handle the current demand for freight. Hence, the leasing of trucks is expected to increase as truck operators have sufficient options to choose from in the used trucks market, according to the freight movement demand.

Some of the prominent players in the market are Paccar Inc. (Kenworth Used Trucks, Peterbilt, and Mack Trucks), Gordon Truck Centers Inc. (Freightliner Northwest), Volvo AB Class B, Ford Motor Company, and General Motors Company, among others. The market is majorly controlled by retail dealerships, with about 75% of the share in the distribution channels. It offers better sales and service support compared to other channels.

Truck manufacturers are focusing on developing innovative powertrain technologies for enhancing the overall fuel efficiency and lifecycle of trucks. This, in turn, increases the operational age of the trucks, which will increase the inventory of used trucks over the years. Though there is an increase in mileage of the used trucks aging 2-4 years, the efforts by truck manufacturers to increase the lifecycle of trucks means that the existing inventory of used trucks will have healthier mechanical health, which will influence the purchasing decisions of the truck fleet operators to go for these trucks.

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