Volvo Truck Market Trends Show a Shift in Age

Market activity has begun to slightly decline for Volvo trucks in the resale channel with prices dropping due to older average ages, the comparison of how the first six months of 2016 fairs against the past 18 months will give a better perspective of how they are holding up so far this year.
The graph shows the difference in model year market share between the resale and auction channels. The resale channel tends to have a much larger percentage of its volume focused on newer models than auction, which impacts average pricing.
 

Key Takeaways for Decision Makers

BUYER/SELLER: The first half of 2016 has shown more stable pricing for used Volvo trucks within the resale channel, but also some of the lowest prices out of the last two years due to age and usage of what is available.

Volvo is one of the more popular commercial truck brands on the resale market, yet we rarely shine a spotlight on them as their consistent presence and pricing tends to bring less attention than other more volatile brands.

During this past June, Volvo held 6.4% of the commercial truck market share within the resale channel alone. This fell behind Freightliner, International, and Peterbilt. The ranking of market share has been consistent for the past four calendar years’ summer months. While activity trends tend to vary in terms of the most popular month for Volvo market presence within both the resale and auction channels, July has been consistently one of the lowest months for these trucks.

The largest month over month resale channel pricing change within the past 2 years (July 2014 through June 2016) was between January and February of 2015, up 11.5%. This was also the largest month over month drop in average age for trucks on the market, down 14.9% between January and February 2015. January 2015 happened to be the highest percentage increase in average age, up 37.1% from December 2014, going from 4.6 to 6.3 years in age.

2016 so far has shown the most stable pricing of the three years included in this analysis. The largest change was between February and March, with a resale channel price drop of 9.1%. This also happened to be the third highest volume increase for the July 2014 – June 2016 timeframe, up 17.6%. The only pricing increase in 2016 was between April and May, up 1.8%. 2016 has also shown some of the oldest trucks on the market given that the average so far is 5.6 years, maxing out at 6.1 in March. To put this into perspective, the 2015 average age for Volvo trucks within the resale channel was 4.8 years and in the second half of 2014, 4.7 years.

There are many differences between the auction and resale channels for used Volvo trucks. The auction channel, as always, has shown much more volatility in both age and pricing. The highest prices for the July 2014 – June 2016 timeframe were in February of 2015 and averaged more than double some of the previous months’ prices. The lowest priced months were October 2014 and July 2015. Pricing changes on the auction channel show minimal seasonality as it depends more on the type of equipment available. For example, the average prices increased significantly between October and November 2015 as average age dropped from 10.0 to 6.4 years and the volume dropped in half. These types of trucks continued to sell on the auction market through December 2015 with the highest volume out of the two year range.

The only time within the past two years that auction had average prices greater than resale was in February 2015. The largest price difference between the two channels was in October 2014 with auction pricing 90.2% below average resale prices. This was followed quite closely to June 2016 with auction prices 89.0% below the resale average price. The largest average age gap was in October 2014. More previously stated, used trucks in the resale channel are averaging quite a bit higher age in 2016 than the previous years, thus the smallest age gaps between auction and resale have occurred within the past four months. The smallest age gap was in March 2016 with auction trucks averaging 10.5 years and resale at 6.1 years.

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