Cummins Engine Market Share Rises in 2011

By Frederick Kiel, Staff Reporter

This story appears in the March 5 print edition of Transport Topics.

North American truck makers installed 99,504 Cummins Inc. engines into new 2011 Class 8 trucks, slightly increasing the independent engine maker’s leading market share to 39.1% from 38.5% in 2010, WardsAuto.com reported.

However, Ward’s Feb. 23 data included engines in trucks that are exported, while state registration data from R.L. Polk & Co. showed that Cummins’ market share for engines made for domestic sale fell, which analysts attributed to growing vertical integration by truck makers.

“These engine figures include those put into trucks for export outside of North America,” Paul Zajac, Ward’s industry data manager, told Transport Topics. Zajac said Ward’s gets the information on engines from the truck makers, not the engine producers.

Ward’s said 254,727 engines were put into new Class 8 trucks built in North America last year, a 65.4% increase from 153,969 in 2010.

Daimler Trucks held onto second place, using 57,909 of its new engines, in its Freightliner and Western Star brands, for a 22.7% market share, Ward’s reported. Most were Detroit brand engines, but Daimler also installed 5,385 Mercedes-Benz engines in trucks for export.

Daimler imported Mercedes-Benz engines for U.S. trucks until the end of 2009.

The export effect also could be seen at Navistar Inc., which put 11,140 Cummins engines into its trucks last year, all bound for Mexico or other countries. Navistar also installed 41,981 of its MaxxForce engines in domestic International trucks, for third place with a 16.5% market share.

“Many countries outside the U.S. and Canada where we compete have pre-EPA 2010 emissions standards, and in some of those markets, we offer our Class 8 trucks with engines built by Cummins,” Navistar spokesman Steve Schrier told TT.

According to Polk, which collects state registration information, U.S. owners registered new trucks with 53,306 Cummins engines last year, for 33.5% of the market, down from 41.8% in 2010 and 48.1% in 2009.

Explaining the difference between sales and registrations numbers, Gary Meteer Sr., account director of Polk’s commercial vehicle sector, told TT “that it can take new truck owners up to 60 days to register their vehicles. There were particularly strong sales in the last two months of 2011, some 38,000 Class 8s, and a lot of them won’t be registered until this year.”

Cummins spokeswoman Christy Nycz said the company was pleased with its 2011 sales. “2009 was a peak year for Cummins as Caterpillar exited the market and Cummins engines were available in all OEM trucks,” she said. “2010 was clearly a transitional year.”

“In 2011, Cummins’ market share stabilized, running between 35% and 40%,” Nycz said. “We believe we’ll continue to achieve market share in this range . . . significantly higher than [our] historical share shown from 2000 to 2007.”

“Cummins used to supply the majority of Navistar engines for the U.S. and Canadian markets,” Meteer said. “Now, International truck buyers can get only Navistar engines, so that’s going to push Cummins’ market share down.”

Paccar Inc. put 14,515 new engines of its own into Peterbilt and Kenworth trucks, which also cut into Cummins’ market, Meteer said. “After Caterpillar went out of [the truck engine] business, Peterbilt and Kenworth were offering only Cummins engines, so that you have to subtract one Cummins for each Paccar engine.”

“Yes, the truck makers are now vertically integrated, but that doesn’t mean they have an engine for every application,” Chris Brady, president of Commercial Motor Vehicle Consulting, Manhasset, N.Y., told TT.

“An example is Paccar, whose largest engine is 12.8 liters, but most over-the-road companies still prefer 15-liters, so they’ll have to spec’ a Cummins,” Brady said.

He said that even though Volvo and Daimler offer 15-liter and 16-liter engines, they still have to be cautious on how hard to push them. “You don’t want to lose customers by saying, ‘You have to buy my engine or nothing,’ ” Brady said.

Still, Brady said that vertical integration can work over time. “Volvo is an example, where over the years, their engines have gained share.”

Volvo Group took fourth place with 26,357 engines, 14,515 by Volvo and 11,842 by Mack, for 16.6% of the market.

In 2008, Volvo put 7,252 Cummins engines into its new trucks for North America and export, compared with 8,822 of its own engines, according to Ward’s data.

By 2011, Volvo placed 19,368 of its own engines in its trucks, compared to only 5,584 Cummins engines, Ward’s said.

Polk said new Daimler trucks with 35,492 Detroit Class 8 engines were registered last year, for second place with a 22.3% market share.

Navistar held third place with 27,256 new engines, for a 17.1% market share.

Paccar built a new engine factory in Columbus, Miss., to build a U.S.-compliant version of a 13-liter engine from its European subsidiary,

DAF, the Paccar MX. In 2011, it placed 15,565 of those engines into its two truck brands, for a 6.1% market share.