PUERTO VALLARTA, Mexico — Daimler’s plan to attain the same market share leadership in Mexico as it has achieved in the US and Canada is coming to fruition.
The company says it has grown its Classes 4-8 market share in the country by 6.7% year to date, to 29.1% of the total market. Its Class 8 share increased 7.2% to 28.4% through November and its Classes 6-8 share is now 30.6%, a 7% improvement compared to 2014.
Whether that makes Daimler the market share leader is difficult to determine, since stats collected in Mexico do not break down the total sales by OEM. Still, its growth is encouraging and vindicating for Stefan Kurschner, president and CEO of Daimler Commercial Vehicles Mexico, part of the Daimler Trucks North America organization.
“We are pretty confident that we are going to close the year with market share above 30% (Classes 4-8), so we think we are well on our way to our target,” said Kurschner.
Kurschner has served in his current role for two years, when Daimler decided to refocus on the Mexican truck market. It implemented changes, including 24/7 parts support and the industry’s first adoption of “peso pricing.”
Pricing vehicles and parts in pesos takes away uncertainty related to exchange rates and gives Mexican customers greater assurance regarding the price they’ll pay for new equipment. Previously, all pricelists and invoices were in US dollars. Introducing peso-pricing was a game-changing move in the Mexican truck market, Kurschner said.
The company’s growth has also been enabled by its strong flagship product, the Freightliner Cascadia with the Detroit DD15 engine.
“We introduced that product here in 2015 and it really changed the perception of our product,” Kurschner said, noting the DD15 has a 90% take rate among Freightliner customers. Still, the Mexican market is not without its challenges.
Kurschner pointed out the average age of a Class 8 truck in Mexico is 17.9 years and there are more than 173,000 trucks on the road that are 21 years or older. Government attempts to encourage fleet renewal have met with little success, stunting the adoption rate of safer, cleaner, more efficient trucks.
Truck manufacturers are also faced with uncertainty regarding future emissions regulations in Mexico. A new standard is coming, but it’s not yet clear whether it will be equal to US EPA07 or EPA13 regulations. Mexico doesn’t even have low sulfur diesel fuel available, so adopting stringent US emissions regulations may not be simple.
Kurschner said guidance from government is required so OEMs can begin preparing for the next emissions standard.
The transportation industry is crucial to Mexico’s economic wellbeing. More than two million Mexicans work in the transportation industry, which represents 4.9% of the country’s GDP. More than 80% of all goods transported in Mexico travel by truck. The country is also home to a vibrant truck manufacturing industry. Kurschner said 35% of all commercial vehicles sold in North America in 2014 were manufactured in Mexico. Half of those trucks built in Mexico were produced by Daimler, which operates production facilities in Santiago and Saltillo, Mexico.
The nation’s economy is expected to grow by 2.6-2.8% this year.
“That’s not so bad when you think about the number but it’s not good enough,” Kurschner said. “An emerging economy such as Mexico’s should see a growth rate of 4% or above.”
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