"Think globally, act locally” could well be the mantra of any large-scale builder of trucks, engines, and major components headquartered anywhere in the world today. The same could be said of every type of top supplier in the global marketplace, from oil companies to tire makers.
Increasingly, automotive manufacturers and associated industries are becoming intertwined on a global level in unprecedented ways. Consolidation has swept through both the passenger and trucking segments of the industry, creating massive corporate entities designing and selling products that serve every corner of the globe. At the same time, skyrocketing research and development costs and new, globally coordinated emissions standards have forced OEMs to move to global products platforms to contain costs and meet varying levels of emission regulations effectively.
And yet, trucks sold in North America today differ widely from models sold in Europe or Asia. The more you pop the industry’s hood and poke about looking for signs of a global truck, the more you may think such a machine may never get built. Moreover, if you talk to North America OEMs, you quickly discover that not everyone can even agree on what a “global truck” is, or ought to be.
“From my experience, the term global truck is often thought of as a truck that meets the needs of all markets across the globe,” says Scott Newhouse, Peterbilt’s chief engineer. He says where we are now involves “leveraging technologies that are being developed globally and applying them most appropriately to each individual market to benefit customers.”
Wade Long, Volvo Trucks North America’s director of product marketing, says that from an OEM’s perspective, a global truck comes down to working with a common architecture and shared technologies. For instance, he says, “We can share lessons learned about safety on our products across the globe. We know, for example, based on the engine’s location in the cab how to best protect the driver in a collision. Another example is whether the truck is a cabover or a conventional, we use high-strength steel due to its effective strength-to-weight ratio as a global feature. “But,” he cautions, “we are a long way from a global truck.”
While it’s impossible to build a single “global truck” that will work around the world, truck builders speak more precisely of having a global manufacturing, research and engineering presence that supplies products tailored for specific markets. Such strategies include debuting innovative technology in the most advanced markets, including North America, Western Europe, and Japan. At the same time, OEMs must counter-balance cutting-edge technology with long-proven components and systems to work and survive in second-tier markets, such as Russia and China, while taking enough sophistication and complexity out of the design mix to ensure the success of products operating in developing global markets, such as India, Africa and parts of Asia.
“We’ve used the word ‘glocal’ to describe thinking globally and acting locally,” explains Kary Schaefer, general manager of marketing and strategy, Daimler Trucks North America. “The understanding of the different markets and customer applications in your region and how global development has to consider those requirements up front.”
Cummins is another manufacturer with a broad global footprint. Mario Sanchez, director of on-highway marketing communications for the company, notes that “while we work within an increasingly global business environment, if you stand back and look at the world’s truck industry with a wide perspective, you soon get a picture of a far more diverse scenario than is typically characterized.”
We’re very familiar with our own North American market, he notes, “but the dynamics can often be very different when you look at specific markets. It soon becomes apparent that what is described as ‘global,’ is in fact, made up of a multiplicity of OEMs, vehicle types, market differences and, of course, emissions standards.”
Across global markets, factors such as efficiency and reliability are “universally influential,” says Steve Slesinski, Dana’s director of global product strategy, planning and management. “But every region has distinct needs driven by varying regulations and preferences. With this diversity in mind, the term ‘global truck’ does not mean a single, identical solution for every part of the world. Instead, this trend is more about OEMs and suppliers working together to leverage global knowledge and engineering capabilities.”
Phil Christman, Navistar senior vice president of joint strategic operations and planning, says rather than a global truck, “I think you see the supply chain for the heavy truck business more global than it ever has been in the past. The trucks may not be global trucks, but there are components of the truck that are coming off of global platforms.”
Regardless of how it’s parsed, the upshot for truck OEMs juggling these conflicting demands is complex: A reality that demands designing products up front that will meet the needs of these various markets, while customizing those products — often down to minute levels — to meet specific local needs.
What’s driving the trend
For truck, engine and component makers, one of the benefits of this approach is avoiding the need to “reinvent the wheel” — investing dollars in engineering or capital on different products that meet the same need.
Volvo’s Long says there is “technology that can be shared everywhere, but where it’s offered must be based on local requirements. It’s about adapting the technology to the market.” With the cost of developing truck technology so high, he says Volvo “places it on the shelf so it can be drawn on by different business units.”
DTNA’S Schaefer points to “speed to market” as a benefit to both the manufacturer and the end user, “especially with how fast technology is moving today.
“We’re more easily able to bring [products] to market by leveraging development work that happens across different regions than by doing it from scratch within our own region or with a third party.” And when you have a large global operation such as Daimler, there is a lot of experience and resources to draw on, she says.
Dana’s Slesinski agrees that the need to reduce duplication of efforts is driving global cooperation. “Vehicles are becoming increasingly complex machines run by advanced systems. Globalization allows us to leverage expertise on everything from electronics to emissions to telematics across all markets.”
Another benefit is economies of scale. “It allows you to leverage the volumes from these other regions and generate some scale,” explains Meritor’s John Bennet, general manager, global product strategy. The commercial truck industry doesn’t have the same type of volumes that, say, the passenger car industry does, he says. “We can generate a lot of savings with global volumes. It helps our cost and the customer has a similar benefit. It reduces complexity in their business as well. Especially customers that act globally like Volvo — they want global platforms.”
Those economies of scale end up in lower cost and complexity for truck buyers, as well, says Schaefer — and also the potential for more reliability due to broader testing. “I think you get a wider range of validation and reliability results,” she says. “In the case of the DD5 [engine], we were able to bring a platform [to North America] that already had millions of miles of testing and production and use in the European market.”
Also bear in mind that technologies are adopted at varying rates around the globe. Peterbilt’s Newhouse points out that disc-brake adoption on heavy trucks was strong in Europe, which helped pave its way here.
“Other technologies, such as for emissions, have been developed in either Europe or North America ahead of the other continent, which has mutually benefited each,” he says. “I think future technologies in visibility and other safety systems could trend in the same manner.”
In addition, Schaefer points out that global customers such as UPS or FedEx often see technologies in other regions and ask if they can get them on their North American trucks — or vice versa, as technologies developed in North America are requested for European or Asian trucks.
The rise of 'platformization’
Manufacturers talk about working off global vehicle “platforms” that are designed to have the same core product, but the ability to be distinctly adapted to the operating conditions and regulatory requirements of specific markets. Global research firm Frost & Sullivan recently identified “platformization” as one of the top trends affecting the future of commercial trucks worldwide.
Global platforms have been seen for years on the automotive side, but it’s a more recent trend in commercial trucks. And for trucks, this “platformization” is most often seen in powertrains.
For instance, Daimler Trucks North America adapted an automated manual transmission used in Europe to bring to North America as the DT12. More recently, it introduced the DD5 engine for medium-duty trucks, again based on a proven design from Europe. Mack and Volvo engines and transmissions are based on those developed by their Swedish parent, and Paccar’s MX engines are available not only in Kenworth and Peterbilt trucks here, but also in DAF trucks in Europe.
Those components get customized for local markets. For example, “A lot of the powertrain components will have different validation requirements because our duty cycles are slightly different,” Schaefer explains, and they may have different software calibrations.
The physical way powertrain components are actually integrated into the chassis must be accounted for, in terms of things such as electrical systems, plumbing, wiring, and mounting. For the DD5, for instance, some of the main integration challenges involved reducing noise and vibration. “The chassis geometry’s different, the engine-to-cab interface is different,” she explains.
Cummins’ Sanchez explains that “while we design our engines as global platforms to reflect our market position, they each come with the inherent adaptability to reflect varying market needs and emissions timing.”
He cites the next-generation 12-liter Cummins engine as an example. The engine being introduced to the North American market as the X12 is derived from the ISG platform, first introduced in 2013 as a global engine platform. It made its first appearance a year later in a joint venture with the world’s largest independent engine maker, Beiqi Foton Motor Co. Ltd. of China. Foton now uses the ISG diesel in a new truck series developed with Daimler of Germany.
“Beyond that it will go forward to meet Euro 6 equivalent regulations as they take effect in many countries worldwide commencing 2019,” Sanchez says.
An example Dana’s Slesinski gives of technology transfer afforded by global relationships is the drivetrain package Dana designed to enable engine downspeeding. “European truck manufacturers were the first to require faster axle ratios to support an engine running at lower rpms, generating higher torque stresses on the drivetrain,” he explains. “We saw this trend ahead of its North American introduction, and were the first to market with a drivetrain solution for downsped engines.”
Eaton also points to downsped drivetrains as a prime example of global technology convergence.
“We are seeing intelligence being baked into the drivetrain,” says Mihai Dorobantu, director of technology planning and government affairs for Eaton’s vehicle group. He notes that regulations in North America, Europe and other parts of the globe related to vehicle emissions and greenhouse gas are helping to drive these trends alongside customer demands for efficiency.
Meritor’s Bennet says that over the past five years, as part of its M2016 strategic plan, Meritor has taken a much bigger role in developing and using products globally.
“We start out with, ‘What are the customer needs in each region,’ and look for areas of common need, common interest, in terms of durability, life expectations, efficiency, serviceability; all those things come into play. What we often find is there’s absolutely an opportunity for similar products in multiple regions. In a lot of cases there is some local customization that’s needed, but some large percentage of that product can be the same.”
As an example, he cites the P600 axle, a heavy planetary hub reduction product initially developed in Europe that Meritor has since deployed to South America, India and North America. “It is truly a global platform,” he says. There have been some local customizations in each region, “but about 90% of the base product is identical.”
Some of those customizations are needed to accommodate differences in things such as suspensions, brakes, and axle ratios, as well as different expectations. “India may not have the same durability expectations, so we may design a larger bearing for the U.S. and a smaller one for India so it’s less expensive,” he explains.
Of course, the U.S. has its own unique characteristics that must be designed for. Cummins’ Sanchez notes that “the role of the driver in optimizing truck productivity and the importance of driver retention is perhaps better recognized in the U.S. and Canada than anywhere else in the world – something that Cummins recognizes in the way out engines are configured and specified. North America also diverges from other regions in terms of EPA regulations incorporating greenhouse gas-fuel efficiency standards, an element that drives significant differences for both the vehicle and the engine.”
Global platforms and technology sharing are increasingly reaching out beyond the powertrain arena.
Daimler, for instance, says it’s branching out into other areas with its platform strategy, especially where it comes to connectivity. For one thing, it is introducing standardized connectivity hardware for all of its trucks. This “mobile router,” where all real-time data is received and transmitted, is the heart of the Detroit Connect telematics system in North America and FleetBoard in Europe.
Navistar’s Christman notes that other areas where we are seeing more global commonalities can be grouped under the general term “safety systems.” “When I say that, I think of brake systems, stability control systems, things like that, where they’re able to leverage the kind of common architecture.”
Germany’s ZF sees the drive to advance safety already leading to greater cooperation between suppliers. “EU regulations now require newly registered trucks to be fitted with electronic stability control, advanced emergency-braking and lane-departure warning systems,” points out Bryan Johnson, spokesman for ZF North America. “To help develop safety critical technologies globally, it is important for companies to find partners much like ZF did when we partnered with Wabco.” He says that cooperation “resulted in our Highway Driving Assist and the development of Evasive Maneuver Assist, both of which were introduced for the first time in the prototype ZF Innovation Truck 2016.”
Many of those same types of technologies are being used to demonstrate the potential of autonomous vehicle technologies that can be adapted to different markets. For instance, Daimler Trucks has developed trucks using its Highway Pilot system and tested them on highways in both Europe and the U.S.
When OEMs speak of the limits to globalization, it’s about the range of factors that keep their various markets distinct. “There are constraints that start to play against globalizing,” says Govi Kannan, Mack Trucks’ senior vice president, brand and product.
He says trucks are designed to meet different regulations, including size and weight restrictions and engine emissions. Then there are such factors as local fuel quality, speed limits, condition of infrastructure, delivery ranges, and geographic and weather-related operating conditions. “Each market started from somewhere,” he says. “So, [technological] progress in each is going to be different according to the constraints at work there.”
“There are economies of scale to benefit from,” says John Gurley, Mack Trucks’ vice president, product management. “But at the same time, we have to make investments to meet specific market requirements.”
For example, Slesinski says Dana recognizes that its U.S. fleet customers “often want to spec their own trucks, and maintain the ability to choose components and vehicle types that provide the most efficient results for their specific applications in their region of the United States.”
One example of how differences in global regions can affect adoption of technologies worldwide was the introduction of selective catalytic reduction in the U.S. to meet emissions requirements. Although global truck makers had already been using SCR to meet European emissions rules, when the technology was adopted in North America, there were many problems with reliability. DTNA’s Schaefer explains that in hindsight, the early challenges in adapting that technology to our market were related to differences in duty cycles between North American and European operations and how regeneration cycles were triggered.
As Peterbilt’s Newhouse sees it, “just as in our personal lives every day, the world is getting smaller, and technologies do jump borders quickly. Taking a global approach toward new technologies benefits customers by lowering costs through economic scale as well as helping bring technology to market faster and optimized at the time of launch.”
Eaton’s Dorobantu observes, “As solutions develop in other parts of the world and are brought into the U.S., at the end of the day it is the U.S. trucker who benefits from them. They get new features that might otherwise be very expensive or take a very long time to develop locally.”
“People want products that perform, and that means uptime and durability and fuel economy and availability of parts and service,” says Navistar’s Christman. “I think the U.S. or Canadian or Mexican consumer is no different from anywhere else in the world — they want products that meet their expectations.”
And if drawing upon global expertise and supply chains helps manufacturers meet those expectations, that’s what they will do.