Oil prices are skyrocketing with more force than the U.S. space shuttle program, prompting a truck supplier to offer a new giveaway. But observers think todays hot summer deals will do little to keep purchases from cooling off tomorrow.
Just after General Motors Corp. had a successful run of its employee discount campaign, Navistar International, the parent company of International Truck and Engine Corp., thinks giving away free fuel is the ticket to selling more commercial trucks.
Dealers hope to convince construction fleet owners to pick up a new 4000-Series International truck by offering with it a pre-paid debit card loaded with $1,000. Users can charge fuel or other expenses on the card. If Navistar finances the sale, it will pile on another $250. The promotion, limited to five trucks per customer, ends on Oct. 31.
Average highway diesel prices climbed to $2.59 per gallon on Aug. 22, a new nominal record that beat the previous weeks average by 2�, according to the Energy Information Administration.
Despite this inflation, observers predict a solid flow of new equipment through 2006. But a manufacturing slowdown in 2007 is likely to follow.
"Things are looking very good for the next six quarters. After that, were worried," says Steven Latin-Kasper, director of market research for the National Truck Equipment Association, Farmington Hills, Mich. Truck sales are up 25.4% over last year, but the monthly rate of growth is on a gradual decline, he notes.
New orders started slipping in the spring as production slots filled up for the rest of the year. That forced many buyers to pick up used machinery instead.
For now, Warrenville, Ill.-based International will try the debit cards to "alleviate some of the financial burden" of todays energy costs, says Mike Elwell, director of marketing for medium-duty trucks. If successful, Navistar says it may expand the program to other models.