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| May 1997 A Newport Communications Service since 1970 |
"...we'll sell 170,000 Class 8 units in '97, as we did in '96, & maybe 180,000 if we can get delivery," American Truck Dealers Chairman Ed Donahue told ATD convention's opening session in Salt Lake City. He said Class 6 & 7 US retail will match '96 at 123,000. Donahue, president of Southwest Peterbilt-GMC, chided Class 8 builders for being overly cautious with production.
Other Donahue predictions for '97: continued weak used truck values; engine manufacturer/truck OEM alliance; shrinking service technician pool; more dealer consolidation; another merger of Class 8 truck builders; another dealer going public; Federal Excise Tax reform. He criticized factory-direct fleet sales at dealer costs or below; they squeeze out smaller operators who buy from dealers. "The fewer small fleets, the more guaranteed large fleet buybacks," he said. "The fewer buyers for used trucks, the greater exposure to losses in the used truck department."
Michel Gigou, Mack Trucks president/CEO, keynoted ATD convention, urging "a new level of partnership" between OEMs & dealers that involves dealers in factories' long-range strategies. "...customers of every size are looking to us for cradle-to-grave support of their vehicles," he said. On used trucks: "As product quality continues to increase & buying cycles shorten, the used truck market will only become a more important part of this business."
Public ownership of dealerships "creates a new market & higher value for your dealership, and it doesn't change the franchise business," National Automobile Dealers Assn. President Ramsay Gillman told ATD. He said there may be "opportunities for fast growth & good returns for some large, publicly owned chains." Dealers who don't go public "will survive very well." '97 ATD/Heavy Duty Trucking Dealer of Year: R. C. Sweeten, president, Performance Truck (Mack/Kenworth), Cleveland, TX.
Renault denies any intention of selling Mack. Swedish newspaper report of pending sale to Volvo claimed Volvo's aim is to double US heavy truck share & gain access to Mack distribution network. Recruitment of Volvo GM President/CEO Marc Gustafson from Mack fueled speculation-so did recollections of Volvo/Renault merger that fell apart in '93. But "Mack remains a key part of Renault's global strategy," says Renault Chairman/CEO Shemaya Levy. Mack touts its 3rd year of profitability-despite an industry downturn. '96 profit was $29 million on sales of $2.14 billion vs. $63 million on $2.38 billion in '95. Worldwide production: 23,614 trucks in '96 vs. 27,680 in '95.
Stu MacKay, MacKay & Co. says truck buyer mix 15 years ago was: 25% LTL; 20% private; 13% construction; 12% lease/rental; 10% truckload; 20% everyone else. Today: 10% LTL; 10% private; 13% construction; 24% lease/rental; 13% high-service truckload; 14% other truckload; 16% everyone else.
Construction segment drives 26% of Class 8 aftermarket parts sales, he says. Private fleets buy 15%, LTL 14%, high-service truckload 5%, other truckload 9%, lease/rental 14%, everyone else 17%. Dealers have 43% of parts market today, will have 55% by 2005, he predicts. Independent shops to go from 8% to 15%, heavy duty distributors from 30% to 15%, engine distributors from 8% to 5%.
Fleets/leasing companies account for 69% of heavy duty service labor; MacKay predicts that will drop to 45% by 2005. Truck dealer service business will rise from 13% to 24% of market, independent shops from 13% to 24%; engine distributors from 2% to 4%. Need for full-service leasing may decline with longer-lasting components, he says. Full-service leasing thrived when new truck sales boomed & dealers weren't hot for service work. Now lessors may shift to logistics-even farm out some service work.
New Kenworth General Manager Ed Caudill says the DAF 45 & 55 might be adaptable to North American market, hinting that they could be basis for new Class 6/7 low COE. Bigger DAF 95 could springboard to a replacement for the aging K100 high COE. Paccar bought Dutch truck maker DAF last year.
Navistar moves ahead with camshaft-less technology. Target: hit 2004 emissions levels without exhaust aftertreatment. Compressed natural gas is an alternative, but expensive & there are concerns about on-vehicle tanks. Build rate at Navistar Chatham plant went from 60/day to 100/day in April. Springfield production will rise with shifting of Paystar to Marmon plant in Texas. Paystar accounted for 6% of production; 40% of in-plant part numbers.
Ford dealers at ATD got reassurances from Freightliner President/CEO Jim Hebe that Ford/Freightliner franchises will remain separate. Some 30 of 157 U.S. & Canadian dealers didn't get certification for HN80, but it wasn't related to Freightliner purchase of Ford heavy truck. Hebe says they'll build everything in HN80 plan, including AeroMax big sleeper. Deal awaits fed approval.
Cummins is making "no bid" alliances with some suppliers. Vendor's engineers work on product development teams & even share some proprietary technical knowledge, says Cummins President Tim Solso. "It's a new way of thinking & operating that has big risks and big rewards," he told TRALA convention in Miami. "But there's unlimited opportunity to reduce costs if we can routinely expand partnerships among driveline component manufactures, OEMs and end-use customers."
Eaton President/COO Sandy Cutler even advocates some partnerships with competitors. "The new rule is deflation," he told TRALA. "We need to fundamentally redefine our customers and our partners. ...competitors today may be partners tomorrow...the day after they may again be your competitors."
Global resources are a must for future success in N. American truck industry, said Volvo GM's Marc Gustafson. 3 critical elements: 1) infrastructure "across sibling companies" that supports common functions like accounting, engineering, product planning, logistics. 2) comprehensive distribution systems & agile information technology. 3) ability to anticipate & adapt to customer needs.
"Chip-based technology is about to take our industry by storm," says Rockwell Automotive President Larry Yost. Technology is advancing at an exponential rate & will do so for at least 10 years, he said. Changes will bring major industry restructuring. "We need to develop the ability to leverage intelligence from all areas of operation & squeeze every bit of profitability out of it."
Freightliner "should be a supplier to the full-service leasing industry-not a player in it," President/CEO Hebe told TRALA. Company has no plans to get into leasing; in fact considers it to be a "channel of distribution" that adds value in the marketplace, he said. Advice to lessors: find new services to differentiate themselves-niches such as municipality/vocational leasing; hazardous incident or trauma teams; NAFTA markets.
TRALA will oppose any taxes that discriminate against leasing, says Gary Alvord, president, Ruan Transportation Management Systems & outgoing TRALA chairman. Other priorities: replacing "unfair ownership responsibility statutes" such as vicarious liability laws, elimination of barriers to dedicated contract carriage. He says TRALA's work over past 5 years has saved the industry over $200 million in discriminatory sales/lease taxes, other regs/tax issues.
Next US medium/heavy truck production upturn: 22.5% surge in 2000, peaking in 2001 with record 466,100, says Starks Research. Current down cycle is mild; will bottom at much higher level than recent past. Output expected to fall 5.7% this year, 8.1% in '98. Contact: (312) 236-5122.
Mercedes-Benz Credit & Deutsche Financial Services to offer "all-in-one" truck & trailer financing through Freightliner dealers. Freightliner builds 200,000th truck at Mt. Holly plant. HPA Assets pays $14.5 million for Monon assets. New owners to offer all Monon products & resume production within weeks.
Federal Highway Administration wants information on heavy truck/bus brake system training courses & materials for a training resource directory. Material must be submitted by May 27 to FHWA Docket MC-97-13, Room 4232, HCC-10, Federal Highway Administration, 400 Seventh St., SW, Washington, DC 20590.
Oshkosh gets $43 million contract for 172 U.S. Army 8-wheel drive/10-ton vehicles, extending "family" contract for heavy tactical trucks to July 1998. Crane's Kemlite Co. buys FRP panel business of Sequentia Inc. Tosco Corp. buys west coast refining/marketing assets of Unocal. Donaldson buys Armada Tube Products Inc. & Lakeside Tube Fabricators.
Tax, labor, environmental issues top agenda for '97 Aftermarket Legislative Summit May 20-21 in Washington, DC. Sponsors: Heavy Duty Distribution Assn, Automotive Service Industry Assn., Automotive Parts & Accessories Assn. Contact: ASIA/HDDA at 847-228-1310.
Barry Langridge to executive vp-industrial operations, Volvo GM Heavy Truck, from Kenworth gm. Chris Patterson to executive vp-sales & marketing, Volvo GM, from Freightliner sales & marketing vp. Mark Lampert to senior vp-sales & marketing, Freightliner, from vp sales. Dan Sobic to Peterbilt assistant gm from general sales manager. Succeeding him: David Rutman, former northeast sales/service manager. Bruce Ewald to Peterbilt fleet sales director.
William Amelio to president, AlliedSignal Turbo Systems, succeeding Doug DeGross who moved to vp-global sales business development, AlliedSignal Automotive. Jim Reis to product marketing director, Stemco Truck Products. Gary Krow to executive vp/gm, Comdata Transportation Services, from senior vp/gm, Comdata Trendar & Transceiver. Lloyd Esler to national marketing director, Transportation Industry Services, Liberty Mutual. Died: Jim Ryder, 83, Ryder System founder.
10-Year Truck Sales Scorecard
Class 8
Class 7
Class 6
Compiled by Heavy Duty Trucking Magazine
U.S. RETAIL TRUCK SALES REPORT
CLASS 8 - 33,000 LB & OVER GVW MANUFACTURER
MAR SALES
YTD SALES
YTD SHARE
Ford 1,357 3,477 8.96%
Freightliner 4,263 11,313 29.16%
Kenworth 1,560 4,039 10.41%
Mack 2,197 4,301 11.08%
Navistar 2,595 6,964 17.95%
Peterbilt 1,499 4,391 11.32%
Volvo GM Heavy Truck 1,198 3,570 9.20%
Western Star 175 494 1.27%
Other 135 253 0.65%
Totals 14,979 38,802 100.00%
CLASS 7 - 26,001-33,000 LB. GVW MANUFACTURER
MAR SALES
YTD SALES
YTD SHARE
Chevrolet 569 1,265 4.91%
Ford 3,202 6,861 26.65%
Freightliner 959 2,558 9.94%
GMC 1,217 2,803 10.89%
Hino 5 14 0.05%
Isuzu 7 23 0.09%
Kenworth 64 198 0.77%
Mack (Renault) 48 122 0.47%
Mitsubishi-Fuso 33 64 0.25%
Navistar 4,020 11,516 44.74%
Nissan Diesel (UD Trucks) 2 3 0.01%
Peterbilt 85 211 0.82%
Volvo GM Heavy Truck 31 105 0.41%
Other 0 0 0.00%
Totals 10,242 25,743 100.00%
CLASS 6 - 19,501-26,000 LB. GVW MANUFACTURER
MAR SALES
YTD SALES
YTD SHARE
Chevrolet 198 426 9.34%
Ford 190 1,035 22.69%
Freightliner 519 1,331 29.18%
GMC 319 841 18.43%
Hino 34 70 1.53%
Isuzu 63 152 3.33%
Mack (Renault) 59 149 3.27%
Mitsubishi-Fuso 53 144 3.16%
Navistar 91 271 5.94%
Nissan Diesel (UD Trucks) 80 143 3.13%
Other 0 0 0.00%
Totals 1,606 4,562 100.00%
1997 RETAIL TRUCK SALES
Class 6
Class 7
Class 8
TOTALS
March 1,606 10,242 14,979 26,827
Year to Date 4,562 25,743 38,802 69,107
96 YTD 4,803 25,329 41,444 71,576
Change -241 414 -2,642 -2,469
Percent -5.0% 1.6% -6.4% -3.4%
Source: American Automobile Manufacturers Assn.
(U.S. Retail)
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