Cummins Maintains Top Spot in Heavy-Duty Engine Market

This story appears in the Feb. 14 print edition of Transport Topics.

Cummins Inc. maintained its market-share lead in Class 8 engines during 2010, although Detroit Diesel Corp. grabbed a bigger portion of the market, according to WardsAuto.com.

Cummins’ share slipped more than seven percentage points to 38.5%, while Detroit Diesel showed its fourth straight year of growth, selling 23.6% of all heavy-duty engines used in 2010, Ward’s said in a Feb. 4 report. DD’s market share rose from 14.6% in 2007 to 18% in 2008 and 20.6% in 2009.

Navistar Inc.’s truck market share slipped, analysts said, because it lacks a 15-liter engine to offer customers.

“What we’re seeing in [the] numbers is a 15-liter shift away from Navistar,” Jay Thompson, president of Transportation Business Associates, a Denver research and consulting firm with a number of fleet clients, told Transport Topics.

“The big winner is Detroit Diesel, especially in the latter months of 2010,” said Thompson. He said Navistar Inc.’s sales were hurt because the company offered only a 13-liter engine in the final quarter.

Cummins, which provides engines to Daimler, Volvo Trucks North America and Paccar Inc., sold 59,285 engines in 2010, according to Ward’s.

Detroit Diesel, which produces engines for the two truck brands of its owner, Daimler Trucks North America — Freightliner and Western Star — sold 36,386 engines last year.

Navistar dropped Cummins as an option, starting with its 2010 engines, but had stockpiled almost 17,000 Cummins engines, so it was able to offer big-bore engines until that supply ran out. It sold 19,407 of its own engines.

Navistar rolled out its proprietary 13-liter engine in mid-2010 and has said it will offer a 15-liter version later this year.

“Navistar picked up notable market share when its ProStar came out [in mid-decade], with Cummins engines,” Thompson said, “but the Freightliner Cascadia is taking it back with the 15-liter Detroit Diesel or Cummins engine.”

Navistar’s International lost its position as 2009’s truck-market leader as Freightliner’s share grew to 32.4% market share in 2010, compared with 25.1% for International.

Thompson said Navistar’s share of the heavy-truck market dropped into the teens in the September-December quarter. “When you lay your options out on the table, the Navistar 13-liter and the Freightliner with a 15-liter, the latter wins. That is what the numbers are telling you,” he said.

Gary Meteer, senior account director at R.L. Polk & Co., Southfield, Mich., agreed.

“Our data, though it tracks just U.S. registrations, roughly parallels Ward’s data and definitely shows the same swing to DD and Cummins,” Meteer told TT. “It shows that manufacturers that can offer 15-liter engines have the advantage.”

Frank Ellett, president of Virginia Truck Center, a Freightliner dealer based in Roanoke, Va., explained why.

“My big clients that run coast-to-coast, they almost all want the 15-liter, especially because they have to go over the Rocky Mountains,” Ellett told TT. “Our 2010 technology is another big factor, they tell me, because it’s working well and producing good fuel economy.”

Navistar spokesman Roy Wiley disputed part of that analysis, saying that fourth-quarter sales of Navistar’s 13-liter engine affirm industry acceptance.

“We always said that, as we switched over to our new engine, there would be an initial pause and a drop in market share,” Wiley told TT. “We’ll start out slow in 2011 and ramp up orders as the year goes on, and our lower market share in the first half will be offset by a higher share in the second half when we get producing our 15-liter.”

Navistar had 12.6% of the Class 8 engine market in 2010, Ward’s said. Navistar’s engine market share had grown from 4.4% to 11.7% in 2009, according to Ward’s.

Of the two Volvo AB companies, Volvo Trucks North America offers both Volvo and Cummins engines, while Mack Trucks offers only its own power plants.

Mack sold 13,546 engines in 2010 for 8.8% of the market. VTNA sold 9,660 Class 8 engines, for a 6.3% market share.

VTNA almost doubled its market share in 2010, Ward’s said.

Ron Huibers, VTNA senior vice president of sales and marketing, told TT that 81% of Volvo’s truck customers bought Volvo engines in 2010, a record.

Paccar Inc., parent of Peterbilt Motors Co. and Kenworth Truck Co., introduced its own engine in mid-2010, a 12.9-liter model, im-ported from its European DAF subsidiary until demand picks up sufficiently to build them in Paccar’s new Mississippi factory.

In 2010, Paccar put 3,616 of its engines into its trucks for a 2.35% market share.

Manufacturers’ positions in the heavy-duty engine market have fluctuated widely over the past five years, as companies maneuvered to meet two rounds of tighter federal emission standards, and as truck makers moved toward the European practice of “verticalization,” with the same firm producing both the tractor and the power plant.