COMMENT: The race is on for truck industry supremacy

BY MARTIN KAHL. As Daimler and Volvo compete for truck industry leadership, other OEMs can only look on at these enormous and growing market leaders

At Daimler’s recent annual results press conference, Wolfgang Bernhard, the head of Daimler Trucks, said the company is seeking to sell significantly more than 500,000 units in 2015; the company also reaffirmed its target of 700,000 unit sales annually by 2020.

In 2014, the OEM’s Trucks division reported 495,668 sales, a figure that includes medium and heavy duty trucks from across its Mercedes-Benz, Freightliner, Western Star, Fuso and BharatBenz brands. The OEM also sells Auman-branded medium-and heavy-duty trucks through its JV in China with Beiqi Foton Motor, and in Russia in partnership with KamAZ.

No other truck OEM looks to be able to come close – either to Daimler or to Volvo

The race for long-term leadership of the truck sector is an intriguing one, with Volvo Group also looking to take the number one spot. In January, Volvo completed its acquisition of a 45% stake in Dongfeng Commercial Vehicles, making the Volvo Group “one of the world’s largest manufacturers of both medium-duty and heavy-duty trucks”. With sales in 2014 of 203,124 mostly heavy trucks, or 233,606 if non-consolidated operations such as its VECV operation in India are included, the addition of Dongfeng’s stated 200,000 unit capacity takes its current potential to somewhere between 400,000 and 435,000 units.

That’s still short of Daimler’s 2014 total, and with Bernhard looking to exceed 500,000 units in 2015 on the way to 700,000, Volvo will need to make its acquisition work hard.

Dongfeng gives Volvo the access it has long needed in China. Dongfeng is the China market leader in a medium and heavy truck market worth a combined 987,000 units in 2014, and the OEM topped the HD sales list in China last year with 155,142 sales, according to Sinocast.

No other truck OEM looks to be able to come close – either to Daimler or to Volvo. Excluding light CVs from the VW Commercial Vehicles division’s results, Volkswagen delivered 199,900 trucks in 2014, thanks to 79,800 Scania trucks and 120,100 MAN trucks. Paccar delivered 142,900 units in 2014, including sales by DAF and the Peterbilt/Kenworth brands.

How to compete with such scale? That’s the challenge and the conundrum for the world’s 100-200,000 unit truck OEMs, as they look on and look up at the two enormous – and growing – market leaders

The 700,000-unit target is not new – the OEM has been working towards this for several years as part of the same strategy that sees it target over 500,000 units in 2015. Given that Daimler is already considerably larger than even some of its close competitors, achieving this level of growth will mean grabbing a very substantial portion of the global truck market. 200,000 additional units is effectively another truck OEM; whether it’s achieved through improved performance in India, a rebound in Russia and Brazil, conquering new markets, and/or some form of partnership or M&A activity, we can reasonably expect to see some interesting manufacturing network developments to facilitate growth of 40%.

In a Megatrends webinar hosted by Greenstreetsoftware.infoWebinar: 2015 Strategic Outlook of Global Medium-Heavy Truck Markets, Frost & Sullivan’s Sandeep Kar commented on the possibility of M&A activity in the truck sector. Not in 2015, he suggested – but beyond that, there could be a “large flurry” of such activity.

How to compete with such scale? That’s the challenge and the conundrum for the world’s 100-200,000 unit truck OEMs, as they look on and look up at the two enormous – and growing – market leaders.


Martin Kahl is Editor, Greenstreetsoftware.info

The AutomotiveWorld.com Comment column is open to automotive industry decision makers and influencers. If you would like to contribute a Comment article, please [email protected]

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