Suppliers Hope Features Lure Buyers
LOUISVILLE, Ky. — With sales of heavy trucks expected to drop sharply from the torrid pace of last year, original equipment manufacturers and some of their suppliers at the Mid-America Trucking Show here last week shifted tactics, emphasizing added features and exploring new markets in efforts to keep customers interested.
In 2006, truck buyers flung themselves at OEMs, hoping to load up on trucks to avoid having to purchase early 2007 models with expensive, federally mandated emission systems.
But U.S. heavy-duty truck sales are expected to drop by 40% this year, so manufacturers at the country’s largest truck show said they are trying to expand their offerings of products and sell them in overseas territories, where they are trying to increase their markets.
“Emissions regulation is driving industry cycles,” said Joseph McAleese, president of Bendix Commercial Vehicle Systems. “We’re selling drum brakes in India, Russia, Brazil and China,” said Kishor Pendse, president of Bendix Spicer Foundation Brake, a joint venture between Dana Corp. and Bendix CVS.
Drums also are the prevailing choice of U.S. fleet managers, according to Bendix CVS figures.
Company executives said during a press briefing they would get by during this admittedly tough sales year through overseas sales, their aftermarket parts business and tighter management. They also hope to create a quick sales turnaround by boosting interest in two sophisticated systems that merge braking with collision-avoidance devices.
“Safety sells,” McAleese said. “We are not dependent upon government mandates for new equipment. There’s a definite payback on these systems.”
Engine maker Cummins Inc. said March 20 that, after concentrating on domestic demand for the past two years, it is finally able to fulfill foreign orders, particularly those from Latin America, Australia and South Africa. “There’s been pent-up demand there,” Cummins Vice President Jeff Jones said.
Executives from axle and drivetrain producer ArvinMeritor Inc. also said they want to do more business in Asia, particularly China and India, both in terms of making sales and buying components.
Though a number of executives used the 40% drop-off figure throughout the show, the general managers of Kenworth Trucks and Peterbilt Motors — both subsidiaries of Paccar Inc. — said, when taken in perspective, this year should still be the seventh- or eighth-busiest year ever for North American Class 8 truck sales.
Chris Patterson, CEO of Freightliner LLC, said that, so far this year, the over-the-road market has been slower than previously anticipated, although medium-duty, severe service and export sales have been higher. “We’ll make money.
The question is, ‘How well will we do?’ ” Patterson said. He predicted that Freightliner, which also makes Sterling and Western Star-brand trucks, will have its “third- or fourth-best year” in terms of profitability, despite the expected steep decline in retail sales.
In spite of the long-term view, Bob Christensen of Kenworth and Bill Jackson of Peterbilt also described similar, though not identical, plans of how they are digging for more business. They said they are moving more deeply into the medium-duty truck market, developing diesel-electric hybrid engines and producing more fuel-efficient, aerodynamic, easier-to-operate tractors with comfortable cabs for drivers.
The two companies are touting their battery-powered alternative to diesel-fired power units: the Clean Power system at Kenworth and ComfortClass at Peterbilt, with both of them debuting this year.
The systems combine in-cab cooling, heating and 110-volt hotel-service power like APUs but provide it through alternators and batteries rather than small diesel engines.
While diesel engines this year emit lower levels of nitrogen oxides and particulate matter, they also have lower fuel economy. Engineers have tried to take back some of that loss through designs that minimize wind resistance and by switching from APUs to the new in-cab power systems. International Truck and Engine Corp. also has moved on aerodynamic design with its new line of ProStar tractors.
Volvo Trucks North America was offering buyers safety and ease of operation and management through a combination of programs called the Volvo Link Sentry and Action Service. Scott Kress, Volvo’s vice president of sales and marketing, said his tractors can communicate via satellite with a fleet office and a Volvo facility.
After transmitting fault codes the tractor generates, Volvo can help plan for maintenance and repair if the truck breaks down. He also said the services can help fleets skip the need to download engine data in-house. With the satellite relay, Kress said, managers can review reports on speed, fuel-consumption, hard braking and other items.
As for sales, Kress said the company has built out the last of its 2006 engines and is now shipping 2007s only. International Truck and Engine Corp. showed for the first time the full range of its new Maxx-Force engines for Class 4-8 vehicles and disclosed the power and torque ratings for its big-bore MaxxForce 11 and 13 engines.
The Class 8 engines, the first ones that International will produce on its own, will be available toward the end of this year, said Dee Kapur, president of International’s truck group. The largest MaxxForce will turn out 475 horsepower and 1,700 foot-pounds of torque. MaxxForce was developed in cooperation with MAN of Europe.
