Predictable Surge In Truck Orders Starting to Happen

Awhile back I highlighted how the Obama administration is repeating a massive distortion in truck market whose consequences are thoroughly predictable. New, onerous fuel efficiency standards are being imposed on truck manufacturers in a repeat of standards that were imposed on truck engine-makers in 2002. Just as in 2002 case, truck operators rushed out to buy the old technology before the new standards went into effect and truck sales fell off a cliff after the deadline. The same will hold true this time around. Although we are not bumping up against the deadline yet, truck operators are starting to load up tractors already. Granted, some of this is just natural recovery and the overhang from a period of low capex, but a desire to load up on pre-mandate trucks is surely part of it. I expect orders to continue to surge for this reason.