Cummins Adds Market Share as Navistar, Paccar Decline

This story appears in the Feb. 11 print edition of Transport Topics.

Independent engine maker Cummins Inc. extended its lead as the primary supplier to the North American heavy-duty diesel truck market last year, growing its market share to 40.4%, from 39.1% in 2011, WardsAuto.com reported.

Daimler AG and Volvo Group also gained share, while Navistar International Corp. and Paccar Inc. lost ground.

Truck makers installed Cummins engines in 110,337 Class 8 tractors built in North American factories in 2012, up 10.9% from the previous year, according to Ward’s. That total includes engines installed in trucks that were exported by the domestic manufacturers.

A majority of Cummins’ engines — 60% — went into Kenworth and Peterbilt trucks, the two nameplates offered in North America by Paccar.

On Cummins’ Feb. 6 earnings call, Chairman and CEO Tom Linebarger said the independent engine maker delivered a record number of its ISX 15-liter engines in 2012, but did not provide a specific number.

“Reviewing 2012 overall, demand in the U.S. started out strong, but weakened as the year progressed,” Linebarger said.

While Cummins grew, Navistar’s share fell to 13.7% in 2012, from 16.5% in 2011. The company installed its engines in 37,355 of its Class 8 International brand trucks, an 11% decrease.

“We associate the change in 2012 engine market share with our shift in engine strategy,” said Navistar spokeswoman Elissa Koc.

In July, the company said it would adopt selective catalytic reduction aftertreatment technology to reduce emissions, changing course from its previous efforts to meet the U.S. Environmental Protection Agency’s standards with exhaust gas recirculation. The next month, the company said it would offer the Cummins ISX 15 engine with SCR in its trucks and add Cummins SCR aftertreatment systems to its own MaxxForce engines.

Koc said Navistar’s 13-liter MaxxForce engine with Cummins aftertreatment is on schedule for pilot production in March and full production in April, predicting engine sales will increase in 2013 following the product’s launch.

Daimler Trucks North America, meanwhile, remained North America’s No. 2 diesel engine producer, with market share rising to 24.2% from 22.7%. Engines built by Daimler’s Detroit Diesel Corp. business went into 60,074 Freightliner and Western Star trucks shipped in 2012, a 14.4% gain from 2011. Shipments of Daimler’s Mercedes-Benz truck engines rose 9.3% to 5,887.

David Hames, general manager of marketing and strategy at DTNA, said the growth of its Detroit engine’s market share is “a clear reflection of . . . our customers’ growing preference for vehicle integration.”

Jim Bauer, sales manager at Eagle Freightliner in La Grande and Hermiston, Ore., said the Class 8 engine market has changed now that all the truck makers have a captive engine, with Cummins as the only “freelancer.”

In years past, Cummins and Caterpillar Inc. used to vie for first place in engine sales, but Caterpillar exited the on-highway market after its Acert EGR engines failed to meet EPA standards.

These days, Bauer said, in some cases, customers look at the engine first before choosing a truck brand.

“If you’re a Detroit guy and you like those engines, and if the engine is a priority, then you buy a Freightliner or a Western Star,” Bauer said. “You used to buy whatever brand of truck you wanted and then choose your engine. Now you’ve got to pick the engine and get whatever comes with the engine.”

Ward’s said the combined market share for Volvo and Mack engines rose to 16.5% in 2012, up from 15.6% in 2011. Volvo’s engine shipments increased 4.2% to 20,175, while Mack engine shipments climbed 23.1% to 24,985.

Demand for Volvo’s I-Shift automated manual transmission continued to drive sales of proprietary Volvo engines, said Göran Nyberg, Volvo Trucks’ president of North American sales and marketing,

John Walsh, vice president of marketing at Mack, said virtually all Mack trucks feature its MP engines and touted the company’s proprietary mDRIVE automated manual transmission.

Paccar’s diesel engine market share declined to 5.2% in 2012, from 6.1% the year before. The company put 14,204 of its own engines in its Kenworth and Peterbilt trucks, down 8.7% from 2011.

Attempts to get comment from Paccar were unsuccessful.

Ward’s numbers show that Navistar shipped 9,932 International Class 8 trucks with Cummins engines during 2012, but those were primarily for export, Navistar said.

Cummins spokeswoman Carol Lavengood said only a “really small percentage” of that total involved ProStars with ISX 15 engines for the U.S. market because they didn’t start shipping until the final month of 2012.

Cummins wouldn’t say how many engines it expects to sell to Navistar in 2013.

For 2013, Linebarger said Cummins expects its North American on-highway business in the aggregate to be “relatively flat to 2012,” but he projected that the company’s market share would rise by about a percentage point.