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Medium-Duty Update: Growing Sales, Diesel Developments, Vertical Integration

Gasoline’s getting more popular, conventionals remain so as new models head for dealers.

October 2016, TruckingInfo.com - Feature

by Tom Berg, Senior Contributing Editor - Also by this author

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As the economy goes, so goes the medium-duty truck business. Sales numbers show continuing healthy growth of Class 3 through 7 commercial trucks, if you know how to read the data.

On their face, sales took a downturn in July and could finish the year 1.8% under 2015’s pace. But they should pick up again in 2017’s second quarter, according to an IHS forecast cited by Steve Latin-Kasper of the National Truck Equipment Association.

However, Latin-Kasper, NTEA’s director of market data and research, notes that the IHS figures are taken from Ward’s Automotive data, which includes Class 3 pickup trucks and vans, and pickup sales are expected to decline in this year’s second half — which would account for the downturn. Take out Class 3, as NTEA does, and the prognosis is more rosy — up 3.6% in 2016 and another 5.4% next year for Class 4-7 sales in the United States. Canada’s projections are similar and Mexico is in a boom, up an estimated 32.1% this year and 21.1% next year.

“The medium duty market has been stable and healthy, and we anticipate a consistent growth rate in all segments,” says Mary Aufdemberg, director of product marketing for Freightliner Trucks. Others we talked with agree.

Diesel developments

Medium-duty diesels have been updated to deliver more fuel efficiency that will also reduce greenhouse gas emissions, which must be reduced by direction of Phase 2 emissions regulations.

Daimler Trucks North America moved further down the path of vertical integration by introducing a new Detroit DD5, a 4-cylinder midrange diesel available for order now for its M2-106 trucks. It will first come from Daimler’s plant in Mannheim, Germany, then production will move to Detroit’s Milford, Mich., plant in 2018. At that time, engine ratings and options will be introduced for other applications beyond the pickup and delivery specs initially available. Later, a 6-cylinder version will follow.

Most builders prefer to sell their own engines vs. those from suppliers. Kenworth and Peterbilt offer private-branded midrange Paccar PX7 and PX9 diesels that are supplied by Cummins. Navistar International is at the other end of the spectrum with “open integration,” where more and more Cummins diesels are used in various truck models, including its DuraStar mediums. However, the recently announced “strategic alliance” with Volkswagen Truck & Bus could result in MAN or Scania engines appearing here, though no sooner than 2019.

Low gasoline prices continue to boost the popularity of gasoline engines. Ram Truck sales, which go to Class 5, have swung toward gasoline, says Dave Sowers, head of Ram Commercial Trucks. “We were 90% diesel until we introduced the 6.4L commercial-grade Hemi engine, and now we’ve been able to increase the gas engine mix up to about a third. It has cylinder deactivation to four cylinders, called MDS, for multiple displacement system, which increases fuel efficiency under light load and PTO running.”

It’s similar at Ford, which also competes in all classes, including 6 and 7. “The gas engine has been a huge success for us from towing companies to landscaping and tree care,” says Kevin Koester, medium-duty truck and Super Duty fleet marketing manager. “There is a lot of interest in a powertrain that removes the upfront cost of a diesel and helps keep maintenance down. Let’s face it, diesel emissions equipment needs to be maintained and has an impact on the duty cycle of a vehicle.”

Access to a gasoline engine could be possible with the deal between Navistar and General Motors for assembly of GM medium-duty models. That might put the now out-of-production International TerraStar back on the line. However, with the MaxxForce 6.7L V-8 diesel dropped, it would also need a new diesel to fill out the options list. GM’s Duramax diesel might fill that bill.

“The future trucks will be jointly developed using Navistar’s expertise in rolling chassis configurations and manufacturing capabilities, and GM’s commercial components and engines,” said a Navistar statement released last year. “The vehicles are slated for production in 2018 and will be manufactured at Navistar’s facility in Springfield, Ohio.”

No more details have been released, says Jim Cain, a spokesman for Chevrolet and GM Fleet & Commercial. The new commercial trucks will carry only Chevrolet badges. GM is moving commercial trucks completely to Chevy while GMC will concentrate on upscale light trucks and SUVs. One effort already begun is the selling of Chevrolet-badged low-cab-forward Class 3 and 4 cab-chassis trucks obtained from Isuzu. As with Isuzu’s NPR models, the Chevy LCFs are available with Isuzu diesels or GM gasoline V-8s.

“It’s strategic for us,” Cain explains. “It’s a great truck, and adding it to our portfolio enables a one-stop shop with our Business Elite dealers. Customers who buy low cab-forwards also buy other types of trucks. We now offer 3500, 4500 and 5500 series (LCF) trucks in 400 combinations.”

For Navistar, the GM deal in effect replaces the Blue Diamond joint venture that ended in 2014 after Ford developed its own V-8 diesel, replacing the Navistar engine, and pulled assembly of its F-650 and 750 trucks from Navistar in Mexico and back to the U.S. Ford now uses its own engines, transmissions and frames, along with cabs and other components.  “Customers love to hear that this truck is built in the U.S.A.,” Koester says. “They like the fact that we’re keeping jobs in our backyard.”

Who’s buying?

What segments are buying, and what types of trucks? “Lease-rental is still strong, and definitely construction right now, and food distribution,” says Glenn Ellis, vice president, marketing, dealer operations and product planning, at Hino Trucks. “We do a trend analysis, which really trends with housing starts and construction. If they’re up, typically Class 4 through 7 follows. The Class 6 market is up this year, up by the most right now, and Class 7 is off a little. Most Class 7 is city tractors. The Class 4 and 5 markets overall are up, but not necessarily cabover. Cabovers are kind of flat, up in 5, down in 4.”

Home construction in the Southeast and construction in general in Northeast are up, according to Ram’s Sowers. “It’s a stable market in the Midwest, though there’s a downturn in agriculture with lower grain and beef prices, but there’s strength in trades and construction. California is growing, but that’s because they were especially down.”

Who’s not buying? The energy sector — oil and natural gas exploration and extraction — which is in contraction since crude oil prices have been down.

There is some shifting among the weight classes as operators “right-size” for their hauling requirements, but also for legal reasons. “We continue to see customers moving portions of their fleets toward Class 6 trucks, specifically to get under CDL weights” that start at 26,001 pounds, Koester says. “Starting out as a new commercial driver is less imposing when you aren’t required to get an upgraded license. It is difficult enough to attract a new generation of drivers without adding license restrictions.”

North American customers prefer the conventional-cab style, historically by a ratio of 80 to 20 or more. Glenn Ellis at Hino says the sales ratio for its conventional vs. cabover models is 75 to 25. But in big, congested cities, low-cab-forward trucks have advantages in maneuverability and compactness. 

“We are seeing a number of our customers continuing right-sizing their fleets, but with low-cab-forward trucks with longer bodies,” says Brian Tabel, executive director of marketing at Isuzu Truck, which sells only LCFs. “The overall footprint of the LCF gives customers the ability to have a longer body with keeping the overall footprint less to make the truck more maneuverable in city and suburban streets. Customers are upfitting their trucks with longer bodies to deliver more products.”

Chevrolet

GMC is now the upscale consumer-oriented brand, as General Motors has designated Chevrolet as both a consumer and commercial truck arm. So Chevy gets the new (this year) Isuzu-sourced LCF (for low-cab-forward ) Class 3, 4 and 5 models, called 3500 and 3500HD; 4500 and 4500HD; and 5500 and 5500HD. Regular and crew cabs are available in most ranges. Isuzu supplies complete 5.2L diesel-powered cab-chassis vehicles; gas models use GM’s Vortec 6000 V-8.  A Class 3 Silverado cab-chassis, essentially a box-delete version of the 3500HD pickup, is the only conventional-style medium-duty model now in the GM lineup.   

Ford

Like 2017-model SuperDuty pickups, F-250 to F-550 cab-chassis trucks (an F-450 is shown) are getting aluminum cabs from the highly popular F-150 series, in Regular, Super and Crew Cab sizes. They also have new, stronger box-section main frames using high-strength steel. All come with a 6L gasoline engine. The Class 6 and 7 F-650 and 750 stay with steel cabs, also in three sizes. The 6.7L Power Stroke V-8 turbo diesel in various ratings is available in throughout the range and is standard in the F-750 and optional in the F-650. The 650 is standard with a 6.8L V-10 gasoline engine that’s optional in the F-750 — the only gasoline power available in medium duty.

Freightliner

M2-106 is Freightliner’s principal Class 6-7 offering, and it is highly customizable to accommodate many specialty bodies and suit many applications, like the beverage-hauling tractor shown. Those and other attributes, as well as faltering by its main competitor, vaulted Freightliner into the market-share lead several years ago, where it remains. Cummins’ ISB6.7 diesel (soon to be the B6.7) powers this model and the severe-duty 108SD version. There’s also the M2-112, which extends into Class 8. A new series of Detroit midrange engines, led by a 4-cylinder DD5, will extend Daimler’s vertical integration strategy to medium duty. Allison automatics go into most Class 6 trucks and many Class 7s, but Eaton manual transmissions are available.

Mitsubishi Fuso

Canter FE-series low-cab-forward trucks were introduced several years ago, and they will continue with necessary diesel upgrades when U.S. federal certification is complete. Their model numbers — FE130, FE160, FE160 Crew Cab, and FE180 — approximate their GVW ratings in pounds in Class 3, 4 and Class 5. There’s also the Class 4 FG 4x4, the only four-wheel-drive LCF sold in North America. All use diesel power and Fuso’s Duonic 6-speed automated mechanical transmission. A “soft launch” of the electric eCanter in 2017 will see the truck offered to some customers in key areas.

Hino

Hino’s model 338 (shown), 268, 258 and 238 domestically assembled conventional-cab trucks are assembled with Japanese-produced cabs and engines and North American frames and drivetrain components. They are now standard with a clean back-of-cab area to ease body mounting by upfitters. Model 155, 195DC (double cab), 195 and 195DC low-cab-forwards are imported. So are the hybrid electric 195h and 195hDC, which are sold into California, Chicago and New York City, which have incentives for buying hybrids.

International

Navistar International’s main midrange truck continues to be the Class 6 and 7 DuraStar, available in three cab styles (and due for Horizon freshening sometime next year). It’s powered only by the Cummins ISB6.7 (soon to be the B6.7 for 2017). That engine also goes into lighter versions of the WorkStar vocational truck. Heavier WorkStars primarily use Navistar’s own 9.2L N9 and N10 diesels, and soon Cummins’ ISL9 (to become the L9). Allison automatics and Eaton Procision automated transmissions are offered, plus Eaton manuals.

Isuzu

Isuzu’s recently introduced Class 6 FTR (shown) is getting interest from operators who want to mount high-capacity long bodies and maintain a compact size useful in congested cities. It’s standard with a 5.2L diesel and an Aisin 6-speed automatic transmission. There are also four Class 4-5 series models; most are diesels with Aisin automatics, but the NPR Gas uses GM’s 6L gasoline V-8 with a Hydra-Matic 6-speed. Isuzu has dominated the low-cab-forward segment for years, and has resumed its relationship with General Motors, whose Chevy commercial truck dealers have begun selling N series LCFs.

Kenworth

Kenworth’s T370 conventional goes from Class 7 to 8 with addition of tandem rear axles and other hefty components. Like the Class 5 T170 and Class 6 T270, it has an aluminum cab, a Cummins-supplied Paccar diesel and Allison automatic or Eaton manual transmissions. Other KW midrange models are low-cab-forward K270 and K370 that use European DAF cabs and North American powertrain and chassis components. KW has steadily expanded options of both series to expand application capabilities.

Peterbilt

Peterbilt Motors’ Class 6 Model 210 and Class 7 Model 220 (shown) are low-cab-forwards that use European DAF cabs and North American chassis components, including PX-7 diesels and Allison automatics. Four midrange conventional-cab models powered by Cummins-built medium- and medium-heavy diesels with Eaton and Allison transmissions. Model 325 and 330 trucks use the PX-7 Allison 5- or 6-speed automatic transmissions. Model 337 can be a Class 8 with heavier axles and the PX-9 diesel, but is primarily a Class 7 model that uses the PX-7. The 348 is similar but can be ordered with tandem rear axles to make it a Baby 8 (up to 54,000 pounds GVW).

Ram

Ram chassis-cabs from FiatChrysler, available in 3500, 4500 and 5500 series, use 2-door Regular and 4-door Crew cabs from popular Ram pickups, and currently come with several ratings of the Cummins Turbo Diesel mated to an Aisin 6-speed automatic or a Mercedes 6-speed manual (the only manual still offered in these weight classes). In three years since its introduction, a 6.4L  Hemi gasoline V-8 has helped the 5.7L Hemi take one-third of Ram’s sales. Chassis-cab models have standard 34-inch-spread frame rails and upfitter-friendly features to ease body mounting.

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