IBM Claims Technology To Trump Truck Brand

This story appears in the Nov. 16 print edition of Transport Topics.

Truck buyers 10 years from now will value robust onboard computing more than a vehicle’s nameplate, according to a new report from IBM, but truck makers and telematics providers disputed that conclusion.

“Brand faces the risk of a slow death,” wrote the authors of IBM’s report, titled “Truck 2020: Transcending Turbulence,” which added, “More and more trucks are purchased by fleet buyers who focus on capability over brand.”

In the report, IBM polled original equipment manufacturers, component suppliers, fleets, dealers, government and industry stakeholders about the most likely influences on truck buyers’ behavior in the year 2020.

Out of 12 motivating factors for purchases — including fuel economy, total cost of ownership and safety — brand name was the only factor survey respondents said would decrease in importance over the next decade, according to IBM’s report.

Conversely, IBM said: “Telematics will be an indispensable element of 2020’s truck, impacting everything about the vehicle and its usage.”

A co-author of the IBM study told Transport Topics that telematics systems will become increasingly important to truck buyers as such systems achieve tighter integration with trucks and drivers and add more features.

“Today’s telematics solutions primarily address driver assistance in the form of routing, business-to-business transactions and basic navigation,” said Connie Burek, an executive with IBM’s Business Solutions unit who specializes in heavy trucks. However, she added, “The capability is not there yet to really integrate the needs of the driver and vehicle.”

Representatives of several truck manufacturers disagreed with IBM’s prediction that brand considerations would dwindle, and one executive said brands are becoming more important in truck procurement, not less.

“Brand is becoming a far bigger decision-making issue to customers than it ever has been in the past,” said James Hebe, Navistar Inc. senior vice president of North American sales. “The emotional factor will continue to be a part of the decision-making process [and] the ‘commoditization’ of the truck has not happened.”

A representative of Daimler AG, the world’s largest truck maker, concurred.

“We are convinced that trucks will not become commodities,” said Georg Weiberg, Daimler’s vice president of truck product engineering in Stuttgart, Germany.

“It would be amazing that it could get to the point where a truck would be truly a commodity,” said Steve Duley, executive vice president of purchasing for truckload carrier Schneider National, Green Bay, Wis.

Still, “2020 is quite a ways off,” Duley said, and it is conceivable that truck buyers then might be faced with a situation where, between brands, “there aren’t as many choices, and the choices are similar.”

Truck makers and third-party telematics providers also said brand names would continue to influence purchasers. They questioned whether telematics could become the primary motivator of truck procurement.

“I do not expect that telematics will become the paramount reason for purchasing a truck,” said Jerry Warmkessel, marketing product manager for Mack Trucks, Greensboro, N.C. “I don’t see the telematics systems overstepping product reliability and life-cycle costs.”

An executive of telematics vendor PeopleNet, Chaska, Minn., voiced similar doubts.

“Telematics is an important piece of the transportation experience, but I don’t know if I agree that that will be the number one reason to buy one truck over the other,” said Brian McLaughlin, PeopleNet’s executive vice president of marketing.

The idea that brand identity would fade in the minds of truck buyers is “hard to rationalize,” said Norm Ellis, Qualcomm’s vice president and general manager for transportation and logistics. “OEMs are not just going to let their vehicles become a vanilla truck.”

Qualcomm, San Diego, is the largest provider of telematics to the trucking industry.

“It’s anyone’s guess” how strongly OEMs will lean on factory-ready telematics to distinguish their brands, said Tom Flies, senior vice president of product management for telematics provider Xata Corp., Eden Prairie, Minn.

Future telematics systems could, for example, harness Global Positioning System location data to make safety systems “more automated, with adjustments to speed at approaching highway exits and monitoring of intersections and blind curves,” said IBM’s Burek.

Such co-functionality would be possible through stability control systems tied to a truck’s anti-lock braking system, Burek said. Third-party manufacturers already offer such systems for the trucking industry. Volvo Trucks North America has a proprietary stability control system that is standard on all new models.

Daimler, too, is using telematics to bolster onboard mechanical systems. In North America, the company offers “RunSmart Predictive Cruise Control, where the speed of the vehicle [on] cruise control is altered, based on 3-D map data,” Daimler’s Weiberg said. This improves fuel efficiency, he said.

Volvo, meanwhile, has tied truck telematics into roadside service, an integration IBM predicted would become more common by 2010.

Since 2007, Volvo truck buyers have been able to opt into the company’s Volvo Link VP system, which, among other things, lets drivers who are stranded on the side of the road send their location and an engine fault code to a Volvo service center.

“This automatically generates a case with our call center,” said Seth Gruber, director of business solutions for VTNA. “We’re running about 40% of our vehicles with this.”

Truck maker Paccar Inc. did not respond to requests for comment by TT’s deadline.