Commercial Vehicle Q&A: Will 2023 Trends Continue Into 2024?

NTEA’s Stephen Latin-Kasper shares his perspective on new vehicle pricing, borrowing rates, and supply and demand in the commercial vehicle market for 2024.

Photo: Automotive Fleet

If 2023 saw decreasing volatility coming out of the pandemic in the commercial vehicle market, what’s in store in 2024?  

Stephen Latin-Kasper, senior director of market data and research at NTEA-The Work Truck Association shared with Automotive Fleet his outlook on pricing, borrowing rates, and supply and demand for the coming year. 

AF: How did commercial fleet demand fare to finish the year?

NTEA: Commercial fleet demand tapered off in the fourth quarter of 2023, which was clearly evident in Classes 2 and 3. Classes 4 and 7 continued growing in the fourth quarter, but the rate of growth decelerated.

AF: How will borrowing costs fare in the near term compared to historical trends?

NTEA: The federal funds rate, which determines many consumer and business loan rates, is currently a bit over 5%. The fed rate averaged about 5% through the 1990s and didn’t fall substantially until the 2001 recession. It returned to 5% during the recovery and then dropped to almost zero because of the 2007–2009 recession, where it stayed until 2016. In 2024, the fed rate will likely fall slowly and end the year at about 4%.

AF: Any forecast on new vehicle pricing? 

NTEA: New vehicle pricing, along with other durable goods pricing, is likely to stabilize in 2024 as the demand and supply of vehicles continue to move toward equilibrium and supply chains become more reliable and predictable. 

AF: Will we see relief in fuel prices?

NTEA: Fuel prices tend to be volatile, as was the case in 2023, and will likely remain so in 2024. Factors that could impact the prices of oil and fuels in 2024 are an expansion of current regional geopolitical conflicts or an increase or decrease in demand for oil driven by global economic factors.

AF: What is the outlook for supply and demand in the commercial vehicle market for 2024? 

NTEA: Commercial vehicle demand remained strong throughout 2022 and the first half of 2023 relative to supply. The market took a large step back toward equilibrium in the second half of 2023. 

Entering 2024, some supply chain issues remain but we’ll continue to see overall improvement. Class 2 to 7 demand growth waned in the fourth quarter of 2023, and that will likely continue through the first half of 2024. 

In summary, 2024 may feel a lot like 2023 as chassis availability continues to improve. Fleet demand growth will likely continue to decelerate in the first half of 2024 before stabilizing and recovering in the second half, along with the U.S. economy. 

Editor’s note: NTEA expresses that its forward-looking statements in this article are subject to change with future market conditions.

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