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Daimler execs looking forward to much stronger truck sales in 2011 and 2012

PHOENIX, Az. - Sales of Classes 6 to 8 trucks in the NAFTA region could hit 210,000 this year, according to Daimler Trucks North America's Martin Daum, compared to sales of 187,000 in dismal 2009. Tha...


PHOENIX, Az. –Sales of Classes 6 to 8 trucks in the NAFTA region could hit 210,000 this year, according to Daimler Trucks North America’s Martin Daum, compared to sales of 187,000 in dismal 2009. That makes for a 13% increase. Of the 210,000 trucks projected to be sold into the recovering North American economy, 133,000 would be Class 8s.

“It’s good compared to last year. It’s lousy compared to everything else. We would not be smiling if we didn’t have 2009 to match against,” Daum told the media during a briefing at the American Trucking Association’s annual conference.

Daimler Truck’s Andreas Renschler placed the figures in greater perspective in his address. Essentially the NAFTA heavy-duty truck market has a very deep hole to climb out of. It is still 62% below the level of 2006, which was a record sales year. There also remains a great deal of uncertainty in the marketplace about the strength of the recovery and that is likely dampening the growth in sales in 2010. Renschler said he sees business investment increasing gradually, with modest inflation and low interest providing some tailwind.

“By and large, we don’t expect a double-dip recession, not here in the US and not globally. There is just going to be a slowdown of growth rates ahead,” he said, adding “I would rather see a slow recovery than another quick recession.”

There may finally be good reason to smile in 2011, when the North American economy is expected to finally kick into a more robust recovery. Investment growth and the need to replace an aging fleet should result in more significant growth rates. Daum projects Classes 6-8 sales in the NAFTA region will reach 260,000, a 23% increase from 2010. About 165,000 of the trucks sold would be Class 8s.

But Daum cautioned that such an increase in sales for 2011 would require a steep incline right from the first quarter of 2011, which may be difficult if the North American economy is still stuck in a slow growth funk.

“I would say 260,000 is an optimistic number. I wouldn’t bet on it,” Daum said, adding the truck maker is prepared to follow any market swing, whether it be upwards or downwards.

By 2012, sales of Classes 6-8 vehicles in the NAFTA market are projected to hit 330,000, a 28% increase from the previous year. By 2015, Renschler projected the world truck market to grow by more than 50%.

Looking further abroad, the commercial vehicle markets in Europe are still below previous year levels but improving. Meanwhile, Latin America -Brazil in particular -remains red hot. There is also a significant upward trend in Asia and the Japanese market -even though tax incentives are phasing out -is finally on the way up.

“So there is reason for optimism,” Renschler said. “And in the long run, it will most likely stay that way. Global trade volume is rising. We expect 7% growth this year alone. And more trade means more transport.”

Looking inward, Renschler said all Daimler Trucks divisions are on the comeback trail. Sales are up 34% (YTD September) and he expects an ongoing sales increase in the third quarter in comparison to the first half of the year.

“We’re renewing much of our product portfolio over the next four years. Coming out of the worst economic crisis in the post-war era, we’re launching the highest product offensive in our history. In the midst of an extremely difficult market and economy, we never took our foot off the gas,” Renschler said.

However, Renschler expects the future to include a lot more sales in Asia. Already, every second truck over six tonnes is now sold in China. Daimler is responding with two new brands and five new plants for commercial vehicles in the region. Its first Mercedes-Benz and Fuso trucks made in Russia have just rolled off the assembly line, prototypes of trucks designed for the Indian market are already on the test track, and the Chinese government has approved Daimler’s joint venture with Foton.

Renschler said it makes sense to push Daimler’s products on a global scale, adding the company philosophy is “as local as necessary; as global as possible.”

“I still think that there will be no one-size-fits-all world truck. But the commonality rate of a heavy-duty truck can be up to 70% right now. That means trucks for Asia, the US or Europe could share a great amount of their parts in the future,” Renschler said. “And I am convinced that’s also of vital interest to our customers because every dollar of commonality savings can be invested in R&D.”

Looking towards the future, Daimler will also have to do a better job at making inroads with alternative vehicles, according to Daum. Daimler customers already operate about 14,000 alternative-drive vehicles, ranging from fuel cell buses to hybrid trucks. But government help would go a long way towards boosting fleet willingness to invest in such vehicles, Daum said.

There is to be a vote in the US Senate this Nov. 17 on a bill that would provide financial incentives as a means to increase the number of natural gas-powered trucks on the road and to promote the build-out of natural gas refueling stations. When asked by Truck News to comment on the bill, Daum said financial incentives “is the only way to go.”

“You see significant savings with alternative fuels. However, the downside is that the savings do not allow for the recovery of the high investment costs,” Daum said, pointing out that government support would create the demand necessary to drive economies of scale that would eventually reduce production costs.

Daimler’s natural gas vehicles offer about a 25% cut in CO2 emissions compared to an EPA 2007 diesel engine with no additional emissions control devices needed.


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