December 2010, TruckingInfo.com - Feature
Retail sales of medium-duty trucks are generally climbing as the economy improves, and the time is right for a sales war, at least in the view of the market leader, Navistar International.
It has declared that it wants half of all medium-duty sales, a move that will result in more aggressive attempts at winning orders if not out-and-out price cutting.
Meanwhile, builders who have delayed introducing 2010-spec diesels have begun installing them as supplies of pre-' 10 diesels run out.
In late summer, Navistar's sales vice president, Jim Hebe, announced that he wants 50 percent of the Class 6 and 7 market, and urged dealers to get extra sales from all the other builders, foreign and domestic. As of August, International trucks already accounted for 49.45 percent of Class 6 and 38.52 percent of Class 7, so salespeoples' efforts will have to concentrate on the heavier segment to make Hebe's dream come true.
Navistar's new sales campaign, "Assault on Medium Duty," includes advertising, product training and special incentives for salespeople that could see them earning as much as $3,000 for selling an International DuraStar, Hebe said. The training was done at a series of two-day "Boot Camps" in seven American and Canadian cities that commenced in early September and ended a month later.
Navistar and its dealers are aiming for 50 percent "not just because we want it, but because we have the best products and the best service, and we are going to earn it," Hebe told a group of dealer salespeople at a Sept. 7 session in Denver. "It's us against the pack" that includes eight other domestic and Japanese builders of medium-duty trucks, as well as Cummins Inc., which sells half the diesels in North America. "There is no bad competitor," Hebe said.
GM-Isuzu Leave Big Hole
One place where Navistar International and others will find some sales is the big hole left by General Motors and its former affiliate, Isuzu Commercial Truck of North America. GM quit the medium-duty business in summer of 2008 and subsequently closed its plant in Flint, Mich., where it assembled Class 4 through 7 trucks. Many were low cabovers made for Isuzu. Closing the Flint plant threw a monkey wrench into Isuzu's plans for the U.S., as it was left without a source of medium-duty trucks.
Supplies of Isuzu trucks with pre-2010 diesels are almost gone, leaving the once-dominant supplier of low-COE vehicles with nothing to sell. About 50 Class 6 and 7 F-series trucks were left as of mid October, and it'll be a year before the parent company in Japan can supply trucks with EPA-2010 diesels. Isuzu is weighing options for assembly in the U.S., including with Spartan Motors, which will begin building gasoline-powered NPR trucks next April. Meanwhile, servicing of existing Isuzu and GM-badged low-COEs will be continued by an expanded Isuzu dealer network; GM dealers lost their W-series franchises as of Oct. 31.
Class 6 Grows
2010 year-to-date retail sales numbers include some curiosities: As of August of this year, more Class 7 trucks than Class 6s had been sold. But Class 6 has grown by 45 percent compared to 2009, while Class 7 is actually down by about 4 percent.
This reflects a continuing trend among buyers to favor the lighter under-26,001-pound trucks so their operators don't need Commercial Drivers Licenses. In most cases, a Class 6 truck will carry as much as its owner wants while allowing him or her to avoid the complexities of CDL compliance.
One bit of news regarding 2007-spec diesels is a small but important change of heart at Ford. Unlike other builders, Ford has not included a switch that drivers could throw to initiate a manual regeneration of the truck's diesel particulate filter. This is necessary if the DPF loads up with soot that normal operation can't burn away. Many duty cycles result in cool exhaust temperatures, requiring intervention by the driver, who is prompted by a warning light on the instrument panel.
Ford believed customers shouldn't have to deal with this, so it tried to write its software so it would trigger an active "regen," using extra fuel to generate heat in the DPF, whenever necessary. But that didn't always happen, so engines were shut down and trucks were crippled.
At one tree-trimming company whose Caterpillar C7 engines high-idled a lot to run PTOs; the exhaust was too cool to burn out the soot, and operators couldn't do anything about it. Trucks had to be towed into dealers where technicians could initiate the regens. Ford acknowledged the problem and authorized installation of a regen switch on those trucks, the fleet manager said.
Anyone having similar problems might inquire about getting such switches for their trucks. And Ford is now offering a regen switch as an option in its new medium-duty trucks with 2010-spec Cummins ISB diesels, which also have DPFs. For 2012, Ford will offer the simpler alternative of gasoline power in its F-650 and F-750 models: its 6.8-liter Vortec V-10 with a five-speed automatic transmission will be an option.
Slow sales in calendar '09 plus another round of federal emissions regulations combined to convolute the 2011 model year for most commercial trucks, including Classes 6 and 7. Meanwhile, truck builders who'll employ diesels needing new exhaust aftertreatment equipment - which is nearly everybody - have devised compact packages that allow almost unimpeded body mounting, even if the equipment will still add substantial weight and cost (about $5,000 to $7,500 for a midrange truck, according to builders).
Some manufacturers had enough existing trucks to last well into this year, so delayed the start of their 2011 model years, while others began them as soon as January. Some builders installed EPA-'07-spec diesels in 2010-model trucks, and when they began installing EPA-2010 diesels, registered those trucks as 2011 models. The Japanese importers used to start model years early, but most of them waited until this fall to do so; about now is when their trucks are getting the new diesels. But some will have a very short 2011 model year because they'll begin calling them 2012's come January.
The practice of pulling ahead model years began a decade or more ago. Builders' marketing people realized that a truck seems newer and more desirable if it carries a title later than the calendar year in which it's built. It replaced the adding of "" to a model year because a new vehicle debuted in the spring instead of late summer or early fall, as was traditional. This happened only occasionally and involved a car or light truck - Ford's 1964-1/2 Mustang and Nissan's '86-1/2 "hardbody" compact pickup come to mind - rather than a commercial truck.
Customers also like the pull-ahead practice because they acquire "next year's model" - a car salesman's term that's about as old as the automotive business - and the vehicle is presumably more advanced than this year's model. And when a customer sells or trades in a vehicle, it's worth hundreds or thousands of dollars more because it seems a year "newer" than it actually is. This is entirely legal, as federal law allows starting a model year as many as 364 days ahead of an upcoming calendar year - January 2 of 2011 for a 2012 model, for instance.
Everybody knows that model years are exaggerated but almost everybody likes it. And anybody who wants to know the real age of a used car or truck can look for a sticker on the door jamb and just read it. Odds are the vehicle's birth year will be its model year minus 1.
F-650 and F-750 conventional-cab trucks are getting new interiors like those installed in 2011-model SuperDuty pickups and cab-chassis models. The interiors are more attractive and include a new gauge package, new panels and clo