However our next slide, near-term order weakness does persist. OEMs continued to build in the phase of weak orders in the second quarter and that just simply is unsustainable. Backlogs are coming down and OEMs are building some inventories, we’re starting to see some custom schedules. What’s causing the order weakness? Truck buyers are concerned about the economy in Europe. They are not willing to put on the extra debt in case there is some kind of a double-dip recession here. Obviously we have some political uncertainty here in North America that will not work itself out until November. Fuel prices were quite high earlier in the year, they have come down but now they are starting to creep back up a little bit and there are some new CAFE standards that are coming in with new engines in 2014, there may be some fleets trying to stretch out some of length of their ownership of the truck to get to those new engines.
Why do OEMs continue to build? First of all they ramped up pretty quickly in third and fourth quarter and it’s not so easy just to ramp right back down. No one wants to lose – risk of losing some market share. There is obviously a favor and there is some market share swing going on out there right there. They want to reduce the backlog of orders they did have and those with inventory creates some cushion there. So as I’ve learned in the last two years the summer months are very typically slow order months, July and August specifically so we’ll see what happens in September, October, November here.
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