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HEAVY TRUCKS RUMBLE INTO THE PASSING LANE
(FORTUNE Magazine) – Perhaps you have noticed more shiny new rigs lumbering along the interstates these days. Sales of heavy trucks to businesses are surging. Through April truckers bought more than 100,000 of the behemoths, up 19% from last year. That's on top of a 13% gain in 1992. The dollars are big too -- roughly $15 billion last year, more than the airlines spent on new craft. The ride isn't over. Economist M. Kathryn Eickhoff, who runs her own consulting firm in New York City, says fleets postponed purchases during the recession, so lots of older trucks have become costly to maintain and demand is strong enough to justify new purchases. She expects unit sales will increase 18% this year followed by an 11% gain in 1994. At Colonial International Trucks in Greensboro, North Carolina, owner John Ray says sales to his customers, mostly regional fleets, are up 25% from last year, which had been the best in 30 years of business. Ray's top-seller is the International 9400, one of the biggest rigs on the road and capable of carrying 80,000-pound loads. He's not alone; nationwide sales of the heaviest, or Class 8, trucks are up 39% this year. Navistar, which makes the International brand, leads with growth of 57%. Potholes ahead? Interest rates could go higher if renewed inflation fears don't abate. Paccar, maker of the Peterbilt and Kenworth lines, says the Administration's proposed energy tax could raise customers' costs and eat into new truck demand. It could also lift Paccar's costs and hurt the company's export competitiveness. But for now, heavy trucks will help haul the economy forward. CHART: NOT AVAILABLE CREDIT: FORTUNE CHART CAPTION: HEAVY-TRUCK SALES |
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