Daimler Trucks: Economy back on track

Daimler Trucks: Economy back on track

PHOENIX. “The good news is the turning point is passed. The economy is back on track. And recovery is steady,” Andreas Renschler, member of the Board of Management of Daimler AG with responsibility for Daimler Trucks and Daimler Buses, said during a media briefing here at the American Trucking Assns. Annual Management Conference and Exhibition

Andreas Renschler, member of the Board of Management of Daimler AG, with responsibility for Daimler Trucks and Daimler Buses.

PHOENIX. “The good news is the turning point is passed. The economy is back on track. And recovery is steady,” Andreas Renschler, member of the Board of Management of Daimler AG with responsibility for Daimler Trucks and Daimler Buses, said during a media briefing here at the American Trucking Assns. Annual Management Conference and Exhibition.

Martin Daum, president & CEO of Daimler Trucks North America (DTNA).

In spite of continuing high unemployment, Renschler was generally optimistic about the future of the industry, both in the U.S. and abroad. “By 2015, the world truck market is expected to grow by more than 50%, to roughly three-million units,” he said.

“By and large, we don’t expect a ‘double-dip’, not here in the U.S, and not globally,” he noted “There is just going to be a slowdown of growth rates ahead. But I would rather have a slow recovery than another fast recession.”

Renschler said the NAFTA market is “climbing out of a very deep hole,” and that the heavy-duty market is still 62% below 2006 levels. “But investment growth and replacement of an aging fleet should result in more significant growth rates in 2011.”

Elsewhere in the world, DTNA is seeing similar signs of recovery,. He said that Europe is “getting better,” while Latin America, especially Brazil, remains “red hot.”

Renschler said that the company is also seeing a “significant upward trend” in Asia, where even the Japanese market is finally on its way up again. “We expect 7% growth this year alone,” he added, “And more trade means more transport.”

At Daimler Trucks, sales are up 34% (YTD September). “Third-quarter figures are not available [to the public] yet,” said Renschler, “but I can tell you that we expect an ongoing sales increase in comparison to the first half of the year. Concerning EbIT, we expect a result in the neighborhood of one billion Euros for 2010 as a whole…All divisions are contributing to that success. Daimler Trucks North America [DTNA] is doing well again.”

Renschler said the company’s Global Excellence strategy, launched six years ago, is the “primary reason for our strong position coming out of the recession,” noting that the first two pillars of the program, Management of Cycles and Operational Excellence, helped enable Daimler to improve effectiveness and efficiency and reduce costs in the process. The next two pillars of the strategy are now in the implementation phase: Growth and New Market Extension and Future Product Generations.

“Once you have great products, it makes sense to push them on a global scale,” he said. “As the world’s largest commercial vehicle manufacturer, we have the best resources to do that. Our philosophy is: ‘As local as necessary, as global as possible.”

When it comes to a “world truck,” however, Renschler stressed there will be no “one-size-fits-all” truck for the global market, although the commonality rate “can be up to 70% right now. That means trucks for Asia, the U.S. or Europe could share a great amount of their parts in the future.” He added that commonality is “in the vital interest of our customers because every dollar of commonality savings can be invested in R&D.”

Renschler said the company last year “came close to selling every third of our trucks in the BRIC [Brazil, Russia, India and China market]” and so-called ‘Next 1’ markets. Among the examples he cited was the approval of a joint venture in China with Foton. “Every second truck over six tons is now sold in China,” he said.

Martin Daum, president & CEO of DTNA, shared the North American company’s forecasts for the year ahead, cautioning that it is “still very difficult to predict,” exactly where truck sales will end up.

However, Daum said for NAFTA the OEM is looking for 210,000 Class 6-8 trucks in 2010; 260,000 in 2011 and 330,000 by 2012. “We are prepared to follow any upswing,” he said, noting that DTNA grew its market share from 31% to 34% during the recession and expects to maintain or even expand that further in 2011. “Managing in an upward cycle, takes as much skill as managing the downturn,” he observed.

Daum said DTNA’s agenda for the year ahead will include:

  • Preparing for CO2 regulations
  • Improving fuel efficiency
  • “Gaining speed” in vocational markets

On going green, Daum was bullish on the need to pursue alternative fuels, even though the ROI is not there yet. “We have to get into the alternative fuels business,” he said, adding that government incentives are “the only way to go for alternative vehicles. We need this government support.”

At the recent IAA 2010 truck show in Hannover, Germany, Daimler had stated the company expects to get 50% of its business from services in the future. In Phoenix, Daum extended the discussion on the importance of service, noting that the need for up-time is driving everything today.

Service used to be all about maintenance and parts, he told Fleet Owner. “Now the question is how can we get to a point where the customer is never failing? Daimler’s goal is to have customers back on the road within two hours.”

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