Change has been the name of the game in the medium-duty truck market — and it's not over yet. In fact, the changes yet to come could permanently alter the medium-duty market.
First, Mack is getting out of the medium-duty market altogether, shutting down its Class 6-7 Freedom line cabovers. According to John Walsh, Mack's spokesman, the company discontinued the Freedom line because of declining demand in that market segment, as well as the costs associated with bringing the truck into compliance with '04 engine emissions regulations.
Mack's departure from the medium-duty market is a bit of a surprise, since it's owned by Volvo AB of Sweden, a dominant producer of cabover truck models in Europe. Volvo purchased Mack and Renault's truck operations over three years ago and one would think that would have allowed Mack to tap into many more resources to bolster its medium-duty business.
Hard on the heels of Mack's exit came Hyundai Truck America's entrance with a Class 4 and 6 cabover. Hyundai previously sold its truck cabs through now-defunct Bering Truck Corp, and the jury's still out as to whether it will have better luck than Bering in selling its cabover product. DaimlerChrysler says it plans to purchase 50% of Hyundai Motor Corp.'s commercial vehicles unit, but has not disclosed when.
In its second push into cabovers, DaimlerChrysler bought a 43% stake in Mitsubishi Fuso Truck & Bus last March. The OEM already owns a 37% stake in Mitsubishi Motor Corp, the Truck & Bus division's parent company. So now the German truck making giant has stakes in two cabover lines it can sell worldwide.
Hino Motors Ltd. is reorganizing its U.S. operations following an unspecified investment by a subsidiary of Penske Corp. It's also planning to build a conventional truck model using its Japanese-made diesel engines in combination with U.S. components. What that means for Hino's Class 4-7 line of cabovers, however, is uncertain: Will they remain in production? Or will Hino switch completely over to conventionals?
None of this has stopped General Motors Isuzu Commercial Truck (GMICT), a joint venture between GM and American Isuzu, to keep swinging for the fences in terms of cabover market share. It plans to expand its product line in 2004 by offering both single- and tandem-axle tractor cabover models, going head-to-head with the dominant Class 7 conventional tractor models. This is a bold move, especially as the overall economy remains sluggish.
All of this is taking place at a time when U.S. truck makers have invested huge sums in revamping their conventional medium-duties. International Truck & Engine Corp., for example, spent nearly $1 billion to design and build its new HP truck chassis and plans to roll out a cabover built in joint venture with Ford next year. Meanwhile, Freightliner poured nearly $250 million into its M2 medium-duty line and GM has followed with its totally redesigned TopKick and Kodiak nameplates.
These changes point to a radical shift in who will produce medium-duty vehicles, as well as how they'll produce them. But one thing is for sure — consolidation isn't going to stop anytime soon.
New emissions rules being adopted in the U.S., Europe, and Japan may be what's really fueling the global consolidation among manufacturers. “One of the most important business issues we must overcome is emissions,” said Claes Claeson, Volvo Truck Corp.'s director of media relations. “Emissions control is one of the drivers of consolidation because no one manufacturer can succeed with this without having enormous international muscle.”