Cummins Widens Engine-Sales Lead in First Half of 2012

This story appears in the Aug. 27 print edition of Transport Topics.

Cummins Inc. widened its lead in the race to sell Class 8 truck engines during the first half of 2012, providing 63,802 units to customers for a 42.2% market share, up from 34.5% a year earlier, WardsAuto.com reported.

Total Class 8 engine sales were 151,026 through the year’s first six months, Wards.com reported, up from 116,903 in 2011. The 29.2% increase is in line with the rise in truck sales.

The latest statistics, provided to Transport Topics on Aug. 17, showed that Cummins’ sales growth of 23,485 from the year-earlier period accounted for about two-thirds of the overall increase of 34,123 additional engines built during the first half of 2012.

“Cummins continues to earn the market-leading position powering both heavy-duty and medium-duty trucks,” Jeff Jones, vice president of sales and market communications for Cummins, told TT. He credited the market share improvement to customer satisfaction with the performance of the ISX15 and ISX12 engines.

Cummins’ sales were almost twice as many as the 32,772 engines sold by Daimler Trucks North America LLC’s Detroit and Mercedes-Benz power plants for trucks made at North American factories. Daimler’s market share was 21.7%.

Engines built by Volvo Group’s Mack and Volvo units totaled 24,934, or 16.5% of the market. That moved the company up to third place this year and dropped Navistar International Corp. down a notch to fourth place, with 21,536 engines, or 14.3% of the market.

Paccar Inc.’s 7,964 engines represented 5.3% of the market.

Frank Ellett, a Freightliner dealer — Daimler’s largest brand — and president of Virginia Truck Center, Roanoke, Va., said that customer loyalty continues to be a primary factor in the buying decision.

“Most Freightliner customers have developed an allegiance,” he said. “The Detroit engine is just a great engine. We are having very good success with Cummins also.”

Ellett said one factor in the increased nationwide Cummins sales was an incentive offered to use those engines during the first half of 2012 because Detroit engines were in shorter supply.

“In 2011, the demand for Detroit engines exceeded capacity,” said Timothy Tindall, director of component sales for Detroit Diesel Corp. “We are well-poised now and in the future to meet the demand for our complete portfolio of Detroit engines.”

Ellett also said demand for new trucks is weakening.

“Orders just have not materialized the way the dealers hoped they would,” he said.

Truck orders have fallen in every month in 2012, compared with the year-earlier month, including a 31% decline in July to fewer than 13,000, the slowest pace in two years.

Factors beyond customer loyalty also play an important role, manufacturers and dealers said.

“During engine selection, users continue to focus on reliability, experience, fuel economy, customer support and cost of operation,” said Tindall, citing improved fuel economy in Freightliner’s new Cascadia Evolution tractor with a 15-liter Detroit engine.

Ward’s also reported that Volvo Trucks engine sales rose to 10,238, a 28.1% increase.

Strong engine sales can be attributed to engine quality and growing demand for the Volvo I-Shift automated manual transmission that is built expressly for use with a Volvo engine, said Ed Saxman, Volvo’s product manager for drivetrains.

Mack engine sales rose even faster, to 14,696, a 52% jump.

Jim Moeller, president of CSM Cos., which owns 12 Kenworth dealerships, also said loyalty to a particular engine brand is a key factor in buying decisions.

He said his company’s dealers in Wisconsin, Illinois, Michigan and Nebraska have had positive feedback about the Paccar MX engines used by regional for-hire fleets.

“General freight carriers are concerned about operating performance, uptime and residual values,” he said. “The MX’s have validated fuel economy claims.”

Moeller said the 13-liter MX engines in particular have shown strong gains in fuel economy.

“Our internal metrics show that each and every month our build of engines provides a higher degree of quality,” said Jack Allen, North American truck group president at Navistar, citing factors such as improved fuel economy.