REDFORD, Mich. (Feb. 28, 2005) — With 2004 on record as the company’s best year ever, Freightliner LLC president and CEO, Rainer Schmueckle, says the Freightliner Group will do equally well or better in 2005.

Revenues for the group hit $12.4 billion on sales of 251,000 heavy- and 161,000 medium-duty trucks in ’04, with Schmueckle predicting sales of 290,000 heavy- and 180,000 medium-duty trucks in 2005.

“Demand and order intake from new medium- and heavy-duty trucks is strong right now — in fact, we’re beyond capacity,” Schmueckle said, speaking to trucking journalists at the recently announced expansion of Detroit Diesel Corporation’s Redford, Mich. facility.

That, Schmueckle pointed out, will have a mitigating effect on any anticipated pre-buy leading up to the introduction of the ’07 diesels.

“We’ve seen no indications of a pre-buy yet, but with many of the OEMs currently building to capacity, and with little bricks-and-mortar expansion planned, I can’t see how we’d fulfill a major pre-buy,” he said.

He also stressed that with the longer lead times and much of the design work already done, the integration and acceptance of the ’07 product should be less of an issue than it was in October ’02.

“We’ll have ’07-compliant engines in customer trucks later this year,” he said. “We hope that will increase the confidence level of the customer, and we’re continuing to negotiate with federal officials for customer incentives to promote early adoption of the new engines.”

Freightliner plans to increase the integration of proprietary components in all its vehicles in the coming years, beginning with increased production of its engine family. In 2004, Schmueckle says, Detroit Diesel’s Series 60 and Mercedes’ MBE 4000 diesels powered 70 percent of the groups’ heavy-duty trucks. He expects penetration to increase as DaimlerChrysler’s vehicle integration strategy gains momentum.

Integration of its medium-duty engine, the MBE 900, grew from 18 percent in 2001 to 33 percent last year, and with the announcement of MBE 900 production being moved from Germany to Michigan, Schmueckle expects sales to rise incrementally from here.

The MBE 4000 has been gaining similar ground since its introduction in 2001. It now powers 37 percent of all Freightliner heavy-duty vehicles sold in the NAFTA region. Production of the Series 60 will ramp up to 270 units per day as of April ’05.

“We remain committed to offering other engine brands to our customers,” Schmueckle says, “but the landscape of the market has changed forever, proving the value of drivetrain integration.”

Volvo Trucks North America has been steadily increasing the use of proprietary drivetrain components, and with the recent announcement by International Truck and Engine Company of an International-exclusive heavy-duty engine co-developed with MAN Nutzfahrzeuge of Germany, the trend toward vertical integration in the North American market has clearly begun.

Freightliner also plans to double its use of proprietary axles next year, relying on its Axle Alliance division to produce them at the Redford plant. That division has been producing axles at Redford since 2001, with installations increasing from 6 percent in 2003 to 18 percent in 2004. Schmueckle says production will double from 50,000 in ’04 to 100,000 in ’05.

Freightliner LLC is the North American arm of DaimlerChrysler’s Commercial Vehicle Division. The Freightliner Group includes commercial vehicle manufacturers American LaFrance, Freightliner, Sterling, Thomas Built Buses, and Western Star. It also includes component manufacturers, Detroit Diesel Corp., and Axle Alliance Co.