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Meritor Expects 40% Growth of Stopping Systems Sales

May 12, 2000

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Global original equipment and aftermarket opportunities, value-added technology innovations and an emerging "light" commercial vehicle segment will be the primary drivers behind the growth of Meritor Automotive's commercial vehicle stopping system business over the next three to five years.

Prakash Mulchandani, president of Meritor's Heavy Vehicle systems, says the company projects a 40% increase in revenue from stopping system sales in North America by 2005. It also expects its stopping system content per vehicle to increase nearly 30%.
In Europe a growing trend among original equipment manufacturers to outsource non-core vehicle systems and components, including stopping systems, could more than double the overall market there -- and significantly boost Meritor's presence there.
At a commercial vehicle advanced braking technology review held recently at company headquarters, Mulchandani said Meritor expects greater demand for medium duty hydraulic disc brakes due to the emergence of a new generation of "light" commercial vehicles.
"E-commerce is creating an increased need for a smaller commercial vehicle designed specifically for local deliveries," he explained. "We believe this will soon become a large and significant market."
The segment, which is growing in most areas of the world, includes Class 3-6 trucks in North America, 2.8-7.5 ton gross vehicle weight trucks in Europe, and 2-4 ton payload vehicles in Japan.
Growth will come predominately from professionally managed fleets such as UPS, Ryder and Federal Express, plus a diverse range of parcel delivery, rental and bus fleets, he said.
"Meritor is in a unique position because we focus on the commercial vehicle market, and we're very accustomed and geared to meet the needs and volumes of these customers," he noted.
Mulchandani said Meritor also expects significant heavy duty truck volume growh in other markets around the world. Those with the greatest potential include India, China, Brizil, Africa and Mexico. "Right now," he said, "we're the only stopping system supplier operating in every region of the world, and we offer virtually any needed drum or disc configuration."
Electronic braking system technology and air disc brakes are key for meeting customer demands in the not-too-distant future.
"I think it's fair to say that regulations around the world will continue to call for higher performance braking systems to enhance vehicle safety," he said. "Once industry issues such as cost and system redundancy are resolved, we'll be well positioned to serve the market with a world-class EBS system."

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