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Daimler Trucks Predicting Another Banner Year

March 27, 2015

By Deborah Lockridge

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The North American truck market continues to heat up, exceeding expectations, said Daimler executives in a press briefing at the Mid-America Trucking Show Thursday evening.

Daimler Trucks achieved its growth and EBIT targets in 2014 and executives anticipate more growth in 2015. In North America, on top of a strong truck sales environment, the DT12 automated transmission has seen sales more than double the company's initial forecasts, which at the time were considered optimistic.

Globally, Daimler Trucks sold 496,000 trucks last year, up 2% from 2013. The biggest market was Asia, with 167,000 units, followed closely by the NAFTA region at 161,000. DTNA President and CEO Martin Daum quipped to reporters, "because we are very competitive here in NAFTA, we will erase that little deficit in 2015."

And that's likely doable, he said, because "at the moment, the U.S. is one of the few really strong markets in the world."

Western Europe saw sales of 57,000 and Latin America sales of 47,000, both down from 2013 numbers.

In the North American, or NAFTA, region, Daimler projects that 2015 Class 6-8 sales will hit at least 411,000, up 10% from last year. Year-to-date they are up 18%, so even though the second part of the year is expected to slow down a bit, Daum told reporters candidly he believes it will be higher than 10%. Class 6-8 sales ended the year at 384,000 in the NAFTA region.

The U.S. Class 8 market is the biggest driver of those gains. The market hit 220,000 in 2014, up 19% from the previous year. Noting that year to date sales are up 25%. Daum believes 2015 will be up just as much as 2014, if not more.

The Class 6-7 market ended the year better than expected, up 12%, and Daimler projects this year it will be up 6%.

DTNA started the year with strong market share, 42.8% year to date for U.S. Class 6-8, up 4.3%, and 41.4% for NAFTA Class 6-8, up 4.4%.

Noting that Germans tend to look at things a little differently from Americans, Daum (who is originally from Germany himself) joked, "If you ask me how is the market these days, a typical German answer is 'not bad,' which in English means 'awesome.'"

Referring to market share, he added, "The head start we had into this year and seeing what we have in upcoming months is very encouraging."

Daimler saw the boom coming last year and has increased production by 16% over 2014, adding capacity for another 27,000 units and hiring 2,300 production workers since last summer. "There is no fear those production slots will go empty; in fact I have the feeling it might not be enough."

Saying it is a nice problem to have, Daum noted plants have been running overtime and weekends to meet the needs of customers. "In the engine plants the only day we didn't work was Christmas day."

Calling it "a history-making success story," Daum showed a chart comparing the initial planned sales of the Detroit DT12 automated transmission when they announced it back in 2012. In 2014, projections called for 6,000 transmissions and 15,000 were actually sold. Projections for this year – and essentially the plant capacity is already sold out for the rest of 2015 – are more than three times the initial projection of 9,000.

In 2012, Daum told reporters he was "on a mission to convert the North American truck market to automated manual transmissions."

"When we announced it, nobody believed it," Daum said  in Louisville Thursday, adding that the capacity of the Detroit plant might not be enough, but that Daimler has a global network it can turn to. "The sky is the limit with the Detroit transmission and I am certain you will see higher numbers for the future."

When it comes to greenhouse gas regulations, DTNA said it intends to be the first to announce certification for the GHG2017 standards.

As far as upcoming standards currently in development at the federal level, Daum emphasized the need for a complete vehicle standard vs. having a separate engine-only standard, as well as a test cycle that mimics the real world. DTNA believes mature and feasible technologies need to be used to meet customer expectations of an 18 to 24-month payback.

"We need smart regulations that should support and foster free markets, and fuel efficiency is something where I want a lot of variables we can optimize. The regulations we have at the moment are good and let's hope the future is the same."

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