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| Statement |
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| In addition, we believe that our diverse customer base, our ability to support large national fleets, and our ongoing focus on our strategic aftermarket initiatives will allow us to outpace the aftermarket industry and to achieve flat to modest aftermarket growth in 2024 |
| Andrew Obin So if I were to summarize it, truck market is bottoming, economy is solid, Rush Enterprises is executing |
| As previously stated, we experienced healthy demand from a variety of market segments |
| Like I said, the hardest thing we’ve got going is the small customer, right? That’s why when the small customer does come back in the overall business, we’re going to be in really good shape, because we’re having overcome that one-third of our business being off double-digits So, that will bring back and I expect vocational to continue to be strong given the government monies that are out there, that are being spent right now |
| With respect to the Class 4-7 commercial vehicles, demand remained solid |
| The manufacturers we represent were able to increase production throughout the year, which led us to significantly – I believe, this is significantly outpacing the industry with respect to new Class 4-7 commercial vehicle sales |
| Despite a challenging operating environment in 2023 caused by low freight rates and high interest rates, which led to great general softness in parts and service sales industry-wide, we were able to achieve a healthy growth in the aftermarket revenues |
| The growth was due primarily to our ability to support large fleets and strong demand from the diverse range of market segments we support, including our refuse, public sector, wholesale and energy customers |
| Municipal business is holding in strong, almost moderate growth rates, as I said earlier, and we expect that to continue |
| Overall, we are very proud of both our operational and financial performance in 2023 |
| And we expect to do better, by the way, given the diversity our customer base, right? I can tell you that the over-the-road business is going to be down more like 30%-plus for the whole year, I believe |
| As I previously mentioned, we added 215 service technicians to our network last year, which enhanced our ability to execute on certain of our strategic initiatives, including Xpress services, contract maintenance, and mobile service offerings |
| We also experienced healthy part sales growth from our energy, refuse and leasing customers |
| Despite challenging market conditions, we are confident that the strategic decisions we’ve made in the past several years to diversify our customer base on supporting large national accounts and to add technicians to our workforce has well-positioned to perform in 2024 |
| And I know it can decline more as the year, also I got to believe it’s in the 14% to 15% range in the Q4, right? So, you got to feel good about where we’re at, the focus that we’ve had, and it’s not just over-the-road customers, right? When I talk about the diversity of our customer base, I’m very proud of what we’ve done by putting a focus individually on each of these sectors, assigning people at the highest corporate level through the mid-level to assign, we have over 300-plus outside parts and service sales people |
| We are confident our diverse product mix and ability to move inventory throughout our network will help us to continue to effectively navigate the used truck market in 2024 |
| That’s what we hope will help keep the order book [ph] better with the growth and on the hits that we’re seeing over-the-road business both for the large customer and for the small person which you know it pretty much out right now out of our mix |
| We are confident that we will be able to navigate a down year and outpace the industry in 2024 due to our strategic decisions we made in prior years to diversify our customer base and focus on vocational customers |
| In both of these things occur, we believe our Class 4-7 commercial vehicle sales will remain strong in 2024 |
| Those factors along with our ongoing efforts to diversify our customer base and support large national accounts allowed us to significantly outperform the industry in 2023 |
| As we look ahead, we expect they will continue to see improvements in the medium-duty commercial vehicle production for the manufacturers we represent, and we expect customer demand to remain strong |
| Florida is doing great |
| Construction is doing extremely well |
| So Oklahoma is still good, going strong |
| In the aftermarket, our annual parts, service and body shop revenues were $2.6 billion, up 8% over 2022 aftermarket results |
| But, I think, we’ve had even going back to COVID year, right, in 2020 and what we did in 2021, what we did in 2022, what we did in 2023, we’re going to execute really well |
| In addition to pent-up demand due to limited new medium-duty commercial vehicle production over the last few years, the manufacturers that we represent were able to increase production throughout the year |
| So when the small guy does come back, you got to feel really good about what you can, where you’re going to be, when that does, and when it pivots back the other direction which you’ve got to believe, we’ve been in a freight recession for 1.5 years, 2 years almost it seems like while the country has been doing decently well, the freight market is huge, all you got to do is read all the reports |
| But I have all the confidence in the world as I always do |
| So you look at what we did, and you talk about being down like that, really continuing to decline over the year, you got to feel good about where you’re at |
| Statement |
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| Though, the industry is expecting new Class 8 truck sales to be down significantly in 2024 due to challenging economic and industry conditions |
| We are still experiencing delays from truck body companies, and these delays impacted deliveries during the fourth quarter, which limited our growth somewhat |
| But when it comes to Class 8 truck sales, I think that the summer is going to be a little more difficult than what we’ve experienced |
| Through the high interest rates and soft freight rates, demand for used trucks was weak, and used truck values declined throughout 2023 |
| Looking ahead, we expect demand for Class 8 trucks to be soft, while demand for Class 4-7 commercial vehicles remains healthy |
| There’s still trucks being put on the market, I’ve heard of a couple of batches this week in big numbers, people are trying to unload, which puts pressure on it, puts pressure on the market |
| ACT Research forecast Class 8 retail sales to be 214,300 units in 2024, down roughly 22% from 2023 |
| Looking ahead, we expect the challenging freight conditions and high interest rates will continue to impact our customers and that aftermarket demand in the first half of 2024 will be similar to the second half of 2023 |
| With that question, most people expect 2026 to be the biggest year in history, given decent economic conditions overall in the country, right? So, yeah, I mean, I would tell you that truck sales will be softer in a second on the summer in the Q2 and Q3, than what we have seen |
| The fact that for the year they were down almost 12% |
| It should be noted that delays from body companies may continue to impact deliveries of new Class 4-7 commercial vehicles |
| Like I said, a little softness in the state or so |
| Everyone knows we’ve known it for a couple of years, the 2024 was going to be a little bit soft |
| Well, it is not as dramatic, it is what it was a year-and-a-half ago, it is still declining more than normal |
| I believe inside of what the 2024 market with a 20%-plus Class 8 decline, maybe not much |
| We’re getting through, I would tell you, a little softer maybe lately in Ohio, I think |
| It’s been under a lot of stress here this last year |
| But the key thing in the truck sales side is, this is nothing that we didn’t expect, but we’re not expecting ACT as it down about 22% |
| So I’ve got to believe that Q4 was probably down somewhere the 13% or 14% range |
| But again, like I said, I do expect the freight market cannot continue |
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