Medium-duty market: Shaken last year, new products getting stirred in this year

Medium-duty market: Shaken last year, new products getting stirred in this year

The exit of GMC from the medium-duty truck segment last year and the withdrawal of Daimler Truck North America’s (DTNA) Sterling marque that began in late ’08 is driving the remaining truck OEMs serving Class 3-7 fleet owners to seek to grow their own share of this lucrative market. That was more than obvious at The Work Truck Show held in St. Louis last week by the National Truck Equipment Assn

The exit of GMC from the medium-duty truck segment last year and the withdrawal of Daimler Truck North America’s (DTNA) Sterling marque that began in late ’08 is driving the remaining truck OEMs serving Class 3-7 fleet owners to seek to grow their own share of this lucrative market. That was more than obvious at The Work Truck Show held in St. Louis last week by the National Truck Equipment Assn.

Speaking to the media at the introduction of two significant medium-duty products-- the International TerraStar truck and MaxxForce 7 engine-- Jack Allen, president of Navistar’s North American Truck Group, remarked that the OEM has continued to invest in the medium-duty market “while others have cut product development or scaled back on marketing.”

Allen went on to say “everything starts with product.” He stated that the new engine was “purpose-built for medium-duty” applications in Class 4-6 trucks and that the new truck was “purpose-built for Class4 and 5.” He said, too, that the dynamics of the medium-duty market had changed— “traditional buyers of these trucks are moving up and down the GVW scale” at a more rapid pace as they seek the most appropriate vehicles for their applications.

Noting the changes in the nameplate lineup as well, Allen said that “Ford, Dodge [now Ram] and GM have been key players [in the lighter end of medium-duty] but Chevy and GMC [brands]—which together held 20% of the market share-- have been pulled out and Sterling is out of the business. So we [at Navistar] see the business as under-served. But we understand these customers and have the engineering and manufacturing expertise and dealer network to position us to claim this market.”

Navistar’s most direct competitor—in medium-duty as well as heavy-duty—has designs on a bigger piece of the medium-duty pie as well. Addressing the media at a Freightliner Trucks news conference, Mark Lampert, senior vp sales & marketing for DTNA (parent to both the Freightliner and the retired Sterling truck brands) made it clear the OEM was up for a fight.

“In the worst truck market we’ve had in decades, Daimler invested more than the rest of the industry combined – into the [Class 8] Cascadia, the [medium-duty] M2 product line expansion, the DD13, 15 and 16 engines, BlueTec emissions systems, and new facilities and improvements – to ensure that our customers will stay competitive in a dynamic marketplace,” stated Lampert.

“Trucking is not going away,” he continued. “Opportunity is not going away, either. If anything, the trends toward more advanced and alternative technologies offer new opportunity for the development of new vehicles to meet specific vocational applications, such as regional hauling and freight optimization in certain sectors.”

Regarding the decision to shut down Sterling (which itself had grown out of Daimler’s purchase of Ford’s medium/heavy truck business some years before), Lampert told FleetOwner that the “discontinuation of Sterling required us to keep that customer base by converting a significantly high percentage of those buyers to be Freightliner customers. There were a couple of [specialized] applications that Freightliner did not offer and that had to be addressed, but we feel we have done [the changeover] seamlessly.”

While going forward in this marketplace with only the Freightliner brand, Lampert clearly stated that DTNA’s goal is “to increase vocational truck sales over the next five years. We will get a lot more specific regarding work trucks,” he added, with the idea being to “build the [vehicle] spec for the specific application” while keeping in mind that “customers think of themselves by what they do with a truck not by the weight class of their trucks.”

Lampert’s formal remarks also included this succinct forecast on commercial vehicle sales: “While retail sales for vehicles will not return to previous peaks until after 2011, NAFTA Class 6-8 truck sales are expected to increase 13% over 2009 with an additional year-over-year increase of 33% in 2011. For the medium-duty sector-- Classes 6-7-- we expect sales to increase more than 21% in 2011 compared to 2010.”

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