The North American commercial vehicle market, dominated by Class 8 heavy-duty trucks, demonstrated unmistakable signs of rebalancing during the fourth quarter of 2025. After a year of subdued demand and elevated inventories, Q4 brought a sharp sequential increase in retail sales, a dramatic surge in new orders, and meaningful inventory drawdowns, pointing to improving alignment between supply and demand despite persistent annual declines.
Q4 Retail Sales Show Sequential Strength Amid Annual Weakness
Retail sales of Class 8 trucks in the United States provided the most visible evidence of market stabilization in Q4 2025. December deliveries reached 20,225 units, marking a robust 62.1% increase from November’s 12,479 units. This sequential jump far exceeded typical end-of-year patterns, which usually see increases in the 20% range due to seasonal capital expenditures.
While December sales remained 9.6% below the 22,383 units recorded in December 2024, the strong month-end performance contributed to a gradual improvement in market momentum. Full-year U.S. Class 8 retail sales totaled 208,386 units, down 13.3% from 240,249 units in 2024. When including Canada, the North American total reached 232,741 units for the year.
The sequential rebound in Q4 reflected several supportive factors, including accelerated fleet replacement decisions driven by tax incentives such as Section 179 depreciation allowances and bonus expensing provisions. Fleets also responded to episodic tightness in the spot truckload market, where winter weather events and temporary capacity constraints pushed rejection rates higher and supported short-term rate spikes.
December Order Surge Signals Forward Momentum
New order activity in December 2025 delivered the strongest indicator of shifting market dynamics. North American Class 8 net orders totaled 42,684 units for the month, representing a 16% increase year-over-year and pushing the seasonally adjusted annual rate (SAAR) to an eye-catching 408,000 units.
This figure stood out as an outlier compared to the year’s overall trend, where total Class 8 orders for 2025 amounted to just 224,000 units. The late-year surge appeared driven by a combination of strong macroeconomic conditions—including 4.3% annualized GDP growth in Q3—and regulatory clarity around upcoming EPA 2027 emissions standards. Carriers positioned themselves for future demand, even as thin margins throughout much of the year had previously restrained purchasing.
The elevated SAAR in December should be viewed cautiously, as it overstated underlying demand strength amid year-end dynamics. Nonetheless, the sharp uptick provided evidence that fleets were beginning to rebuild confidence after an extended period of caution.
Inventory Levels Drop Below Key Thresholds
One of the clearest signs of rebalancing emerged in inventory metrics. Throughout much of 2025, dealer inventories hovered at elevated levels, often exceeding five months of supply and contributing to pricing pressure on both new and used equipment. By the end of Q4, retail sales outpaced production, pulling inventories below three months for the first time in recent periods.
This drawdown represented tangible progress toward normalization after a prolonged period of oversupply. Lower stock levels helped stabilize pricing in the used truck market, where values had softened earlier in the year due to excess availability. The inventory reduction also eased some of the downward pressure on OEM production schedules and supported healthier dealer economics heading into 2026.
Manufacturer Performance Varied in Q4
Market share shifts among major manufacturers reflected differing strategies in response to the challenging environment. Freightliner maintained its leadership position, capturing 34.5% of December sales with 6,971 units delivered, slightly ahead of its year-ago pace.
Volvo Group brands showed mixed results: Mack Trucks posted a 4.6% increase to 2,207 units, while Volvo Trucks North America saw a 17.8% decline to 2,213 units. Paccar’s Peterbilt and Kenworth brands experienced double-digit drops of 21% and 14.2%, respectively. International Motors reported a 15.4% reduction.
Only two of the seven major OEMs posted year-over-year gains in December, underscoring the uneven nature of the recovery even as overall activity improved sequentially.
Broader Context: Capacity Tightening and Freight Market Dynamics
The Q4 developments occurred against a backdrop of structural adjustments in the trucking industry. For-hire carriers faced recession-level margins through much of 2025, driven by weak freight demand, elevated operating costs, and persistent excess capacity. Private fleets continued to gain share, supported by higher driver compensation and more stable operations.
Highway tractor fleet numbers contracted steadily as weak profitability forced exits and reduced new additions. While capacity still exceeded demand at year-end—evidenced by softened used truck prices—the pace of tightening accelerated late in the year. Spot truckload rates exhibited volatility, with sharp spikes tied to weather disruptions and temporary capacity constraints, though they remained below historical averages.
These conditions pointed to an ongoing correction cycle rather than a rapid rebound. Structural capacity contraction is expected to continue into 2026, potentially setting the stage for improved carrier profitability and more sustained demand for new equipment once demand begins to recover more broadly.
Disclaimer: This report is based on industry data and market observations. It is intended for informational purposes only and does not constitute investment advice, financial recommendations, or a solicitation to buy or sell securities. Market conditions are subject to rapid change due to economic, regulatory, and geopolitical factors.
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