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Global strategy paying off in volatile economic climate for Daimler

LAS VEGAS, Nev. -- Daimler’s global presence has matured to the point where the company is capable of offsetting weaker markets with stronger ones, and able to stick to its sales targets despite short-term uncertainties, according to its...


LAS VEGAS, Nev. — Daimler’s global presence has matured to the point where the company is capable of offsetting weaker markets with stronger ones, and able to stick to its sales targets despite short-term uncertainties, according to its leader, Andreas Renschler.

Despite the lingering economic uncertainty, the globe’s leading truck manufacturer aims to sell 500,000 units in 2013, more than 500,000 units in 2015, and 700,000 units in 2020.

“We used to be at the mercy of market cycles. Today, we are pretty good at riding them out,” Renschler said during an executive press briefing here in conjunction with the American Trucking Associations Management Conference & Exhibition. “There might be economic headwinds on our way. But we can also count on some tailwinds. We are the market leader in the profitable regions of NAFTA and Europe. We are leading the field in Turkey. We are No. 1 with Euro V vehicles in Brazil. And we expect to sell more profitable heavy-duty trucks in Asia.”

Renschler said Daimler is enjoying sales growth in Europe despite weaker demand in southern Europe, demand in Brazil, although weakening, is still at a high level, sales are showing very strong growth in Japan and Indonesia, US sales growth so far in 2012 is about 25% and Canada is knocking it out of the park this year with 56% growth.

“There is some serious growth in the NAFTA region. The good thing is, our growth is outpacing the market’s. Our sales went up by almost a third compared to last year.”

He added that even more important than sales growth is market share, and Daimler Trucks North America is the market leader in the Classes 6-8 segment.

Renschler says the company’s philosophy is helping drive the impressive performance and it’s a simple one: As global as possible, as local as necessary.

That creates a broad range of advantages for Daimler, including more flexibility in manufacturing, less complexity in its supplier base, faster time-to-market, and higher quality products, he said.

“All of that is good for us, but most importantly: It’s good for our customers: They get the best technology, tailored to their needs, at a competitive price,” Renschler added.

He pointed to the Freightliner Cascadia Evolution – considered the company’s “next big thing” as a prime example. Thanks to aerodynamic improvements and the Detroit DD15 engine, the truck consumes up to 7% less fuel than its predecessor, under real-world conditions, Renschler claimed.

Asked whether the flipside to a global and integrated platform is not strained relationships with suppliers such as Eaton, Meritor and Cummins, Martin Daum, head of Daimler Trucks North America, said it doesn’t have to be.

“Cummins is as much a global company as we are. We benefit in the US from their expertise and we are very close partners when it comes to those innovations,” Daum said, pointing out that working with partners when possible also helps in riding out market highs and lows.

Daum’s remarks also revealed that the time when Daimler will be so integrated with its own products it would no longer need other component manufacturers is not in the near future.

“They are our largest suppliers today and they will be our largest suppliers in the future,” Daum said.

One area where Daimler is leaning on suppliers is in the move towards natural gas engines. Although it has its own engine manufacturer, Detroit, it is still leaning on Cummins for natural gas power. Daum said the market for natural gas engines is still far from large enough to warrant placing its own resources towards making natural gas engines for the North American market.


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