DTNA keeps focus on products and service

LOUISVILLE, KY. The recovery strategy espoused by Daimler Trucks North America and its German parent, Daimler AG, is pretty simple – keep attention and investment dollars tightly focused on product research and development so it maximize profitability for itself and its customers as the global economy returns to health.

“It feels like we’ve had 18 months of winter as we lived through one of the toughest periods in economic history,” said Andreas Renschler, head of Daimler’s global truck and bus operations, during a press conference here at the Mid-America Trucking Show. “But the fog is lifting, and though challenges remain, we are preparing to place our brands and products in a position of strength in what’s become a very competitive global [truck] market.”

Renschler noted that Daimler plans to renew its entire product lineup – from trucks to engines and components – over the next four years, with the company rolling out 140 new vehicles or major components worldwide in the next 24 months alone. This effort results from Daimler’s effort to keep R&D spending high – increasing it 60% between 2008 and 2009 even as sales plummeted 45% and revenues dropped 36%.

He added that economic indicators to date signal some positive trends for the commercial truck market in the U.S., with orders up 58% this past January compared to the same month in 2009, with that order volume holding steady into February. Consequently, Renschler is confident that the U.S. commercial truck market should experience a modest recovery this year, with sales growing 10% to 15%.

Martin Daum, DTNA’s president & CEO, echoed that confidence, noting that U.S. gross domestic product (GDP) should increase 3% to 4% through 2011. “We’re seeing signs of a more robust housing market, which is always a leading freight indicator – and freight is everything that matters to this industry,” he said.

Daum predicted that U.S. trucks sales should grow 13% this year over 2009, with year-over-year volumes growing 33% from 2010 to 2011. “The average age of the [U.S.] fleet is 6.5 years – the highest it’s been since 1986,” he noted. “So we plan to be ready to ride the wave of recovery when it comes.”

DTNA believes it will benefit from this projected increase in truck sales for a few reasons: namely, customer-documented fuel efficiency gains from its 2010 selective catalytic reduction (SCR) emissions control system married to a new “virtual technician” support system to help fleets better control maintenance costs and minimize vehicle downtime.

“We’ve found our 2010 Cascadia equipped with a 2010 Detroit Diesel DD13 or DD15 engine is getting up to 5% better fuel economy compared to our 2007 models from the most authoritative source – our customers,” Daum said. “We have 150 customer demonstration units in the field, with many at 150,000 mi. and some at 300,000 mi. – and that 5% figure is holding true.”

Those numbers are critical, he believes, as the surcharge for Daimler’s trucks due to SCR’s price tag remains steep -- $9,000 for its Class 8 trucks, $7,300 for Class 7 vehicles, and $6,800 per medium-duty unit.

DTNA has also partnered with Allison transmission to offer what it calls a series of “optimized” integrated automatic transmission and Detroit Diesel DD16 engine packages for customers buying Western Star and Coronado Severe Duty trucks. These “packages address seven to eight different severe service applications and are designed to offer customers improved fuel economy and performance alongside driver convenience.”

To make its vehicles even more attractive to customers, DTNA plans to roll out a new service next month called “Virtual Technician” that will come standard on all 2010-model Western Star and Freightliner branded trucks equipped with Detroit Diesel engines, Mark Lampert, DTNA’s senior vp of sales and marketing, said.

The goal of this program is to perform “predictive maintenance” on trucks, pulling diagnostic information and parts needs from a vehicle before it reaches a dealer location, thereby improving service scheduling on the dealer side while getting DTNA customer trucks back on the road faster. “It’s designed to boost operational efficiency both for our dealers and our customers alike,” Lampert said.