SAN ANTONIO. W. M. “Rusty” Rush – chairman, CEO and president of Rush Enterprises – believes U.S. Class 8 sales are slowing and will continue to slow into 2016 as the freight markets keep softening.

Yet he retains “all the confidence in the world” that trucking is not falling off a “cliff” but is rather returning to the more cyclical up and down patterns that characterized the industry’s past.

“We’ve caught up with the replacement cycle of the last couple of years; the age of the [Class 8] fleet is now as low as it was in 2005,” Rush explained in a wide ranging interview with reporters here at the 10^th annual Rush Truck Centers (RTC) Technician Skills Rodeo. “It’s not a cliff, but sales are going down; I felt it coming this summer and [the trucking market] is ending up where I thought it would be.”

He expects U.S. Class 8 retail sales will end up around 269,000 units for 2015 and trend down to 230,000 units or below next year.

“We were hoping for a 15% [drop] but now I don’t see any way [sales] will be off less than 20%,” Rush said. “Cancellation rates [for Class 8 orders] started this summer and we’re seeing manufacturers cutting back on production. If you look at freight, it’s soft, with spot rates off 20%.”

Yet he stressed that things didn’t start “going in that direction” overnight and would gladly take a U.S. Class 8 retail market of 200,000 to 210,000 units in 2016.

“And you know 200,000 units is not a bad year. In the past, the industry averaged 190,000 to 200,000 units in good years,” Rush said. “People have gotten caught up thinking the sun is going to shine [in trucking] every day; it’s a cyclical world.”

However, Rush emphasized that he thinks Rush Enterprises’ overall business won’t be off more that 10% in 2016, largely due to rising Class 4-7 medium-duty truck sales and steady parts and service business.

Rush noted some of those trends in the company’s third quarter earnings report back in October, pointing out that aftermarket services accounted for approximately 64% of its gross profits in the third quarter this year, with parts, service and body shop revenues increasing by 5.9% as compared to the third quarter of 2014 – contributing to a quarterly absorption ratio of 116.2%.

“Continued demand for repair and maintenance of vehicles in operation, with particular strength on the East and West coasts, fleet andnatural gas vehicle modifications and mobile services were the primary drivers of aftermarket revenues in the third quarter,” he said back in October.

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