International Truck & Engine Corp. said shrinking the number of component suppliers it works with by using more exclusive partnerships should eventually help it reduce truck pricing in the future.
"We're trying to leverage the skills of our supplier base through exclusive and semi-exclusive partnerships to eliminate excess costs and improve our products," said Steve Keate, president of International's truck group. "As our customers are demanding more from us in terms of greater vehicle uptime, easier serviceability, better performance, greater resale value, and more durability, we're looking to our supplier base to help us achieve those needs."
Keate said International has achieved such integration most visibly with its medium-duty product line, which it upgraded as part of a six-year, $1-billion effort to completely re-design its entire line of trucks. He said, for example, that supplier integration allowed International to reduce the engine and transmission options for its new medium-duty line from 800 down to 34.
"Better integration with our transmission supplier allowed us to optimize shift points with our engine, improving the truck's overall performance even as we reduced available engine-transmission combinations," he said.
Keate said that supplier integration strategy is now being applied to its Class 8 line to provide customers with more simplicity and better component functionality. That could be most critical when it comes to improving fuel economy.
"If we can get our engine, transmission, and tire suppliers to work together with us to improve our Class 8 fuel economy by even 1-2% through greater component integration, that could result in fuel cost savings to the customer," Keate said.