High shine on sales

It’s April and already you can call 2004 a banner year for class-8 truck builders. January marked the third straight month of year-over-year increases in class-8 sales in Canada and the United States, with all major truck manufacturers reporting gains. February and March were peppered with optimistic announcements about truck production, an indication that customers who took a wait-and-see approach to engines that comply with current emission rules finally are ready to buy. Freight volumes are rising and interest rates are not. Heavy-truck production in North America in 2004 is expected to hit between 230,000 and 245,000 units and swell to 270,000 in 2005. Cautiously, there’s reason to believe the frenetic pace should continue in 2006–right up until the next round of emission rules in effect in January 2007.

Volvo Trucks North America will add a second shift at its New River Valley plant in Dublin, Va., next month, boosting production of Volvo VNs from 73 per day to 112. The company has recorded several large fleet orders, including one for more than 4,000 Volvo VN 670 high tractors from Swift Transportation, one of the largest truckload carriers in North America. Volvo will be Swift’s primary truck supplier for a two-year period, with an option for up to three years. The trucks will have Cummins ISX engines and Volvo’s D-12 engine.

“Our orders have been very robust over the last several months, including February, and we expect this will continue,” says Scott Kress, the company’s senior vice-president of sales and marketing. “Dealers see a need for inventory on the ground to satisfy the needs of owner-operators and small fleets, both of which are starting to buy again.”

Kress says demand is being driven by better fleet utilization, which is putting stress on the older trucks many fleets are running. The average age of trucks in service is now about 7.3 years, he says.

International Truck and Engine president Dan Ustian unveiled plans for a new class-8 line-haul truck expected by 2007 or 2008. “We expect this product to be as revolutionary as our new 7000 and 8000 models have been and to make clear our intention to be the product leader,” says Ustian. Currently, International builds its flagship class-8 9000 Series in Chatham, Ont.

If you’ve been out of the market for more than a year, you’ll find some equipment changes in long-established nameplates. The number of truck makes is about the same, but some familiar models are gone and an old badge that nearly vanished–Autocar and its versatile Xpediter chassis–is back in production.

But the real story is how consolidation among truck builders and suppliers has reduced choices in engines, transmissions, and other components as product planners pare options lists in the name of efficiency or competitiveness.

The push by truck builders for alliances with component suppliers has meant fewer options for buyers who prefer to spec their trucks. For instance, International announced it would buy its fifth wheels only from Fontaine and cut out three other suppliers. You still can get other fifth wheels, but dealers must install them.

Truck manufacturers have made similar decisions on axles, transmissions, and countless other parts over the years. These so-called strategic alliances are designed to hold down costs because in return for steady, long-term business, the supplier agrees to relatively low prices. The truck builder can pass some of the savings on to you, the buyer, or at least it can mitigate any price increase.

The biggest impact on choice involves engines, the most expensive single component in a truck and the one that develops real emotions in some buyers. Customers complained bitterly when competitive pressure prompted International, Kenworth, Peterbilt, and Volvo to remove Detroit Diesel from their databooks after it was sold to Freightliner LLC’s parent, DaimlerChrysler. The Series 60’s fuel efficiency in the late 1980s and early 1990s saved many truckers from bankruptcy.

Freightliner has pared its engine options, too, dropping the Cummins ISM and ISX and making Mercedes-Benz its stock heavy-duty diesel. The S60 is still the best-selling engine in Freightliners, however, and various Caterpillar models are optional and popular in Sterlings and Western Stars.

Truck manufacturers are crossing their fingers that customers won’t be deterred by the extra cost to buy and operate engines with exhaust-gas recirculation or other emission controls. Sales were slow during the months following the October 2002 deadline as customers put “pre-buy” units into service and continued to shy away from the new engines. No one wants a boom-bust sales cycle in 2006 and 2007 like the industry experienced in 2002 and 2003.

That’s why truck and engine suppliers are working hard to show that the basic strategies engine companies are using to comply with the current emission standards for heavy-duty diesels will apply to 2007.

Builders expected a big sales upswing as last year wrapped up and truckers realized they have to buy something to replace aging iron. But financing for new equipment can be tough to get and insurance premiums remain high, so many prospective truck buyers are looking at buying used. There are plenty of trucks available. Trouble is, the supply of low-mileage used vehicles has dwindled and high-milers continue to roll in because so many new trucks were sold during the record years of 1998-2000.

High mileage today means 700,000 to 750,000 miles, where a big-bore engine still has 25 per cent or so of its life left. Depending on make, other parts like front-end bushings and upholstery may be falling apart, so such a truck usually takes some fixing up.

Still in demand are trucks with pre-October 2002 engines, and they’ll stay valuable until the new engines gain wider-spread acceptance. If you have such trucks, you’d be wise to hold onto them. Or maybe you should trade now, because by January ’07, when the next round of emissions limits will force more engine changes, today’s diesels will look golden and today’s trucks will be in demand.

Higher prices are hard for customers to stomach. Most builders list the more costly new diesels as a surcharge on the price sheet, and say buyers reluctantly pay. But there are reports that some of the surcharges aren’t holding up in the marketplace. If you’re in the market for one, two, or a whole fleet of new trucks, remember that everything is negotiable. And a few builders have incentives that can soothe some of the sting.International once was the dominant producer of cabover trucks in North America, its boxy 9800 model fronting nearly every J.B. Hunt, Schneider National, Frito Lay, and Wal-Mart rig on the road. But between 1988 and 1998, class-8 cabover sales plummeted 90 per cent as fleets pursued the smooth ride and spacious sleeper cabs of the latest conventionals. By 1999, International had relegated 9800 production to a factory in Brazil, where the model is made for export markets.

But the company is back in the COE business, this time with a new low-cab-forward truck called the CF Series. With production scheduled for 2005, the truck will compete with cabovers from Mitsubishi and General Motors.

“Buyers of cabover trucks have never had a consistent or reliable North American choice,” says Tom Cellitti, general manager of International’s medium-duty business. “By extending the International brand into these markets, we’ll offer high standards of powertrain performance and reliability, as well as the industry’s best parts and service support through our dealer network.”

The first two CF Series models are the CF 500 (16,000-pound GVW rating) and CF 600 (19,500-pound GVW), both with International’s VT 275 diesel engine. The 4.5-litre V6 produces 200 horsepower at 3,000 rpm, and 440 foot-pounds of torque at 1,850 rpm. A five-speed overdrive automatic transmission is standard and a PTO is optional.

The truck’s most distinguishing characteristic, however, may be International’s dealer network, about 1,000 strong in Canada and the United States. “Customers can count on excellent service support, rapid parts availability, and competitive parts prices,” says Cellitti. “For customers who own trucks in a variety of vehicle classes, International can be a single-source partner to help them own and maintain their diverse fleet of commercial vehicles.”The October ’02 emission deadline was Freightliner’s cue to drop its venerable FLD highway models. It didn’t engineer in the new diesels-a decision that made sense, as the FLD120 and FLD112 were giving way to Century and Columbia models.

However, severe-duty versions of the FLD are in production, partly because Freightliner builds thousands of militarized FLD120SD trucks and tractors for the U.S. Army. The Army’s FLDs are exempt from the latest emission limits, so their Series 60s don’t have exhaust-gas recirculation.

Mack, on the other hand, did engineer its new diesels into its long-running RD trash and construction series, but dropped the RD anyway in favour of its Granite models. To celebrate the end of an era, the company announced a special edition of the vehicle, the R-Model Legend.

The RB, with its setback front axle, will continue until a Granite-derived replacement can be engineered. So will the DM, with its cab offset to the left for better visibility, as long as orders are sufficient.

In 2001, Grand Vehicle Works Holdings acquired the now 106-year-old Autocar name and Xpeditor line from Volvo and since has aggressively marketed the class-8 low-cabover-engine trucks to trash haulers. It plans to pursue construction, fire-rescue, city delivery, and other specialty users.

Initial units were built under contract by Volvo, but Autocar’s own factory at Hagerstown, Ind., now makes the regular cab WX64 and low-profile WXLL64. There’s also a WXR64 with right-hand drive. Caterpillar and Cummins diesels to 385 hp are among the components offered.

In March, the company marked its first full year of production with a record month, building more than 125 trucks at its plant in Hagerstown, Ind.

Autocar has six dealers in Canada and more than 70 across North America. For details contact www.autocartruck.com or call 1-877/973-3486.

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