PHILADELPHIA, Pa. — As one of the strongest years in history for new truck orders winds down, Martin Daum, CEO of Daimler Trucks North America, predicted demand will soften somewhat in late 2015 and in 2016, but will still remain healthy and above normal levels.
He cautioned against reading too much into order numbers in the latter part of this year, which will be well short of last year’s extremely robust numbers but still well above 2013 levels.
“October and November order intake will be significantly lower than last year, but last year was not normal,” Daum said, citing “monster” orders in October, November and December 2014. Those strong months created a 100,000-plus unit backlog and customers had to wait more than six months to receive their trucks. Daum said that’s not ideal.
“For me, the October we’ll see this year is far healthier than October of last year,” he said.
For 2016, Daum feels demand for new trucks will fall somewhere between that seen in 2014 and 2015. This year will see 435,000 Classes 6-8 trucks sold into the NAFTA market, up 13.4% compared to 2014. A “normal year” represents about 375,000 units. As fleets begin placing their orders for next year, Daum said “I’m confident to say it will be less than 2015 but better than 2014 – somewhere in between.”
Daimler has just approved a new record for research and development spending, and will invest US$563 million into R&D next year.
Daum, speaking to the trucking press at the American Trucking Associations’ Management Conference & Exhibition, said DTNA delivered on all of this year’s corporate goals with one exception. While it achieved its targets regarding: unrivaled integration, world-class R&D, service evolution and growing its market presence, Daum said he wasn’t entirely satisfied with the rollout of the new Western Star 5700 XE. So far, 582 units have been delivered but Daum wanted to see 1,000 or more units deployed by now. Still, he said customer reception of the truck has been excellent and it’s performing extremely well, with fuel economy close to that of the Freightliner Cascdadia.
DTNA is pleased with the market share growth it achieved this year. It now has 38.7% of the NAFTA Classes 6-8 market. In Canada, it has grown its Classes 6-8 share by 2.7% to 34.4% and it also owns 39.5% of the US Class 8 market, according to Daum.
Daum was especially proud of Western Star’s growth in Canada. In September, it experienced one of its best months in its history, outselling Mack and Peterbilt and coming just 49 units shy of eclipsing Navistar, Daum said. And all this in a down market for oil and gas, where Western Star has traditionally been strong.
Asked by Trucknews.com what was driving this growth in Canada, Daum attributed it to the versatility of the product line and the excellent Canadian dealer network.
“Western Star dealers are amazing with what they can do on the body side with the Western Star truck,” he said.
Canada’s overall Classes 6-8 truck market is up 3.7% this year, at 36,000 units, well ahead of a “normal year” which would see 32,000 trucks sold. Daum said he continues to see Canada as a “balanced and strong” truck market.
Looking to 2016, DTNA’s goals are to: continue its growth; deliver superior customer service; unveil the next Evolution; accelerate connectivity; and complete the integration puzzle.
The company will also be working towards achieving the looming GHG Phase 2 standards. While Daum said DTNA supports the objectives of the program, he also pointed out truck makers have no control over the biggest environmental culprit: congestion.
The EPA/NHTSA GHG Phase 2 standard aims to reduce fuel consumption by 1.8 billion gallons over the 10 years of the program, but Daum noted 2.2 billion gallons of fuel are wasted every year due to traffic congestion. Traffic bottlenecks cost 1.4 billion gallons of fuel each year and another 800 million gallons are wasted due to traffic accidents, many of which can be avoided using currently available safety technologies.
Daum urged regulators to go after road congestion and not just vehicle manufacturers, to reduce emissions. He also warned against a further NOx standard, which he said would only drive up the cost of new trucks with no customer or societal benefits.
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