Coming off of a record year for North American Class 6-8 market share in 2017, Daimler Trucks North America is looking forward to a busy year as it keeps on top of its supply chain to meet high customer demand and readies for some big new-technology announcements.
In a video conference call for reporters, DTNA President and CEO Roger Nielsen teased upcoming announcements about predictive maintenance, electric trucks, and further advanced driver assistance systems that can lead to autonomous technologies.
The Truck Sales Challenge: Staying on Top of Demand
Around the world, Daimler Trucks last year sold more than 470,000 trucks last year. In North America, Daimler Trucks North America posted record Class 6-8 market share of 39.8%, or about 151,000 trucks, buses and chassis.
Driving that success, Nielsen said, were:
- More than 46,000 orders for the new Cascadia
- Increasing popularity of the integrated Detroit powertrain, with 96% of all Cascadias spec’ed with Detroit engines. The DT12 automated manual transmission goes into 75% of all Cascadias and Western Star 5700 (93% in the new-generation Cascadia).
- Detroit Assurance 4.0, the latest version of DTNA’s active safety system suite, which uses a camera system and radar to provide adaptive cruise control, emergency braking, lane departure warning, etc. “The penetration rate far exceeds what we expected,” Nielsen noted, saying it’s spec’ed in nearly 90% of Cascadias.
- Western Star was at an all-time high for order intake.
- Aftermarket parts sales; 2017 saw another parts distribution center open in Indianapolis, and Daimler expanded with its acquisition of the Mascot driveline reman business.
For 2018, DTNA expects a “significant increase in overall sales,” to levels seen in 2015, if market conditions remain sustainable. January and February order intakes so far this year are at or near record levels.
“To meet that demand, we’re increasing production capacity everywhere,” Nielsen said, noting that the truck market “has definitely headed up – it’s over-caffeinated like me.” Asked what’s driving the market, he said, “we’re seeing real demands from real shippers who need vehicles. As we survey regular customers, we are not seeing truck parked along the fence – they’re able to seat drivers.”
However, he said, for all but a few DTNA customers, those truck orders are for replacement trucks rather than added capacity.
In addition, he said, “the market does have an upper limit,” and the challenge in meeting the demand for new trucks will be the supply chain for parts and components. Daimler has flexible capacity to make models in more than one location. “When I look at the constraints our suppliers are facing, it’s not raw materials, it’s labor – people who want to come work second and third shift.”
2018 Goals: From Uptime to Electric Trucks
Nielsen outlined six goals he has for Daimler Trucks North America in 2018:
- “Put our customers first in every aspect of our business.” Much of this revolves around uptime, he said, whether it’s designing reliability into new products, extensive product testing, improving turnaround time and transparency in dealer repairs, or using data to help give insights and speed decision-making. In data it tracks from a representative group of customers, 55% of repairs are not completed within 24 hours. While that’s an improvement, Nielsen noted, it’s still not good enough for fleets, who’d love to have repairs made during the 10-hour break time of the driver. The next step, he said, is predictive analytics. (See more below.)
- “Continue the Detroit success story.” In addition to high market penetration for Detroit engines and DT12 transmission, nearly 73% of DTNA vehicles have Detroit axles on the front and 46% on the rear axle. “Now we turn our attention to the continued successful rollout of the MDEC medium-duty line of engines,” the DD5 introduced in 2016 and the DD8 being rolled out now. “We are focusing on giving choices to our medium-duty customers that they don’t necessarily have anywhere else in the industry.”
- Successfully manage the market cycle. As noted above, expected high truck sales will put a strain on the ability to produce the trucks ordered. Someone wanting a truck delivered in the first half of the year is already out of luck. “We are a global company with a global supply chain, and frankly the difficult part of the task now is to manage the supply chain and make sure everyone keeps pace with demand.”
- Upgrade and expand the parts business. A new parts distribution center is opening in Des Moines, Iowa, bringing the total to nine, and more PDCs are planned for the West Coast. “With this, over 80% of dealers are now within 350 miles – less than a day’s drive – of a PDC,” Nielsen noted, allowing for next-morning or even same-day parts delivery. DTNA continues to expand its product lines of Alliance Truck Parts, and will be opening Alliance Truck Parts retail stores throughout the country. E-commerce, he said, is part of the picture as well.
- Leverage the global resources and technology of Daimler, especially in the area of truck electrification. Mitsubishi Fuso last year rolled out the eCanter, and just this month Mercedes-Benz announced a “baby 8” heavy-duty electric e-Actros for Europe. Nielsen hinted that we’ll see a truck electrification announcement here in North American mid-year.
- Drive future technology. “We want to put future technology out there that makes sense for our customers,” Nielsen said. “They don’t want new technology for the sake of technology; they want new technology because they believe it can give them a competitive edge in the marketplace and can reduce their real cost of ownership.” Daimler is spending more than 500 million euros, some $620 million, for research and development into connectivity, electric mobility, and automated driving for trucks.
To help with these goals, DTNA has a couple of new executives. Sanjiv Khurana has been appointed to the newly created position of general manager of connectivity. Andreas Juretzka is heading up a newly created electric mobility group. Both report directly to Nielsen.