October Truck Orders Will Fall, DTNA Says

PHILADELPHIA — The October report on Class 8 truck orders that is coming out in early November will not look good, said the CEO of Daimler Trucks North America, but that will be because numbers will be compared to a highly unusual corresponding month last year.

“Last October was a monster month,” DTNA’s Martin Daum told reporters here Oct. 19. That became the first of three uncommonly big months for North American orders that led to a bloating of the backlog-to-build ratio of six months — about twice the level manufacturers like to see.

Daum said he is comfortable with his company’s current order intake, which is more typical of an ordinarily healthy year. He said one to three months is an ideal range for a backlog of unbuilt trucks.

DTNA is the parent company of Freightliner and Western Star Trucks and Detroit brand engines, transmissions and axles.

Looking toward 2016, Daum said full-year sales of Class 6-8 trucks in North America should drop from this year’s current rate of 435,000 units, but remain above the 2014 tally of 384,000 vehicles.

He said the prediction of decline should not generate alarm.

Daum said, “2014 was a good year. I saw fairly happy faces in the industry then, and 2016 will be better than that.”

He also discussed the Phase 2 federal greenhouse-gas proposal. The company backs a firm timetable through 2027 and opposes both an acceleration to 2024 and the idea of a midcourse evaluation.

Daum said he is highly confident of meeting the early stage obligations that would affect trucks built in 2020. As for the final stage of 2027, that's harder to pin down.

“I’m confident we’ll reach the target, but I don’t know how we will do it,” he said.

One reason for Daum’s confidence is his research and development budget of more than $500 million a year. The 2016 R&D budget was recently set at $563 million, up from $547 million this year and $485 million last year.

In 2007, right before the recession started, DTNA’s R&D budget was just $280 million.

As DTNA works to meet the Phase 2 targets, which are expected to be made final by June 30, Daum also threw down a challenge to the federal government. He said highway congestion wastes about as much diesel and gasoline as the regulations save.

A fully funded surface transportation plan that eases the nation’s congestion would also save on emissions of carbon dioxide, nitrogen oxides and particulate matter.

“I got here six years ago, and we were talking about infrastructure then. An infrastructure bill is way overdue,” Daum said.