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DTNA's Daum: Reduced Truck Orders Actually Benefit Customers

October 19, 2015

By Deborah Lockridge

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DTNA CEO Martin Daum talks to reporters in Philadelphia. Photo: Deborah Lockridge
DTNA CEO Martin Daum talks to reporters in Philadelphia. Photo: Deborah Lockridge

PHILADELPHIA — Don’t expect truck sales in the fourth quarter and next year to be like the “monster” numbers of a year earlier, says Martin Daum, CEO of Daimler Trucks North America — and that’s a good thing.

In its annual review at the American Trucking Associations’ Management Conference & Exhibition, Daum warned journalists that when the industry announces October and November order intakes, they will be down significantly from last year.

But last fall’s numbers were not normal, he stressed, “and ultimately in hindsight that was not good. We had that monster October and it triggered a monster November and monster December.”

Orders continued strong into the first part of the year, as fleets put in orders to make sure they would have the build slots needed. The result was a backlog that meant customers “had to wait more than half a year before we could even consider producing the truck,” Daum said. “That is not normal and I don’t want to force people into those situations.”

The situation led to a lot of cancellations in the third quarter of this year, although August and September orders, even minus those cancellations, were still normal, he said. 

“For me, the October we will see this year is far healthier than what we saw last year,” he said, even though it could be down 50% compared to last year.

Daum projects that 2016 truck sales (U.S. Class 8 as well as NAFTA Class 6-8) will be lower than this year — but higher than 2014, a very successful year for truck sales.

“If we didn’t have the great year of ’15, for which I’m thankful and appreciative, then we would celebrate” at his projected 2016 numbers, he said.

Daimler Trucks North America Progress Report

From a corporate standpoint, Daum said DTNA has performed well against its goals this year, although there aren’t as many of the new Western Star 5700 EX trucks on the road as company officials had hoped — and he hinted at big news this time next year.

Those goals were:

Unrivaled integration. Daum gave that a green checkmark, noting that telematics adds yet another level of integration. Its heavy duty engine penetration stands at 86%, while the DT12 automated manual transmission is 12% — and already at 41% in the Cascadia. At the same time, he emphasized that DTNA does not want to force integration on customers.

“For me it’s always let the customer decide. It is a product that speaks for itself. We make sure the product speaks a very clear language, and that language is TCO, total cost of ownership.”

Research & Development. Calling it “the name of the game,” Daum noted that DTNA spent more than $500 million on R&D for the first time this year and said next year it will be even higher. And that R&D investment, he said, is “our answer to any GHG ruling.”

Service Evolution. Another green checkmark, with recent and new announcements pushing technology to help make the process more efficient — but there’s much more to be done, he said.

“We have to change significantly the service experience for our customers. Trucks don’t get easier. I hear complaints, ’30 years ago I could stop at any gas station and get a hammer and it was fixed.’ Yes, and there were times when we had to harvest by hand and those times are gone too.”

Daum noted the success of Virtual Technician, and referred to the new announcement of the ability to flash the engine over the air. “You don’t go to the Apple Store every time you have to update an app,” he noted, so why should a truck owner have to take the truck in to the dealer every time there’s an update?

Western Star 5700 XE: This was the only yellow checkmark in the bunch. As of Friday, there were 582 units of the new fuel-efficient truck delivered. The goal had been to have 1,000 of them on the road by now.

“But the reviews from the customers are great, the performance data from the trucks are great. But the Western Star trucks are more used to one or two at a time,” he said. Now they are seeing orders more like Freightliner is used to, with 20 or 30 or 40 in an order.

“This has messed with production,” he said, but expressed confidence that it was a temporary problem.

Grow market presence. Right now, year to date, Daimler has 38.7% of the NAFTA Class 6-8 market, and nearly 40% of the U.S. Class 8 market, both up somewhat over last year, and Daum pronounced himself satisfied.

Looking ahead, Daum said at next year’s ATA conference they will report on their success in the following areas:
• Continuous growth of DTNA. “We think we still have room in this market.”
• Superior customer service.
• Unveil the next Evolution model. Daum hinted at a big announcement.
• Accelerate connectivity. “That I think is a big challenge. That is completely uncharted territory. You have to tiptoe with speed.”
• Complete the integration puzzle. No further details were offered. We’ll have to wait until ATA MC&E in Las Vegas next year.

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