Not surprisingly, it is European and North American manufacturers who dominate the global truck market, although, as DaimlerChrysler points out, four of the world’s largest manufacturers are based in Asia and account for more than 30% of global truck production, leaving little doubt where the greatest expansion is likely to be in the short to medium term. The United States remains the largest market in the world for commercial vehicles. John Kendall reports.
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From a global perspective, there has been considerable consolidation over the past 10 years, concentrating ownership into fewer hands. Although it is convenient to discuss manufacturers by geographical location, it is becoming decreasingly relevant to do so as ownership of brands extends across the globe. While we shall consider regional issues, i.e. emissions standards and markets later, to provide an initial overview, it is simpler to consider the major players across the globe, which brands they own and where they manufacture vehicles. Before doing so, it would be helpful to put the global position in some context. Commercial vehicles differ considerably in the major markets and a brief outline of the differences and why they exist forms a useful starting point.
Trucks manufactured in the two leading markets, Europe and the United States, differ considerably, even though many manufacturers produce vehicles on both sides of the Atlantic and brand ownership extends across the Atlantic in both directions.
The most noticeable difference among heavy trucks is the basic appearance of tractor units that pull trailers. In North America, the engine is usually located in front of the cab, with a “sleeper box” providing sleeping accommodation to the rear of the cab on long haul trucks. In Europe, the engine is usually beneath the cab floor with sleeping accommodation incorporated in the cab immediately behind the driver and passenger seat. Sleeping accommodation tends to be far smaller than in an American truck.
The reason for the differences lies in local regulation. In the European Union, legislation determines the maximum length of a tractor/trailer combination, while overall height is less limited in individual states. In America, where available road space is arguably greater, the situation is reversed, with fewer restrictions on length. This allows tractor units to be longer and offer more accommodation than their European counterparts.
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By GlobalDataThe differences don’t end there though. Regulations do not determine the makeup of the vehicle. Customers in North America have far greater choice over components. Truck manufacturers traditionally supply a rolling chassis fitted with a body. The choice of driveline components is determined by the customer. This, “Horizontal Integration” has led to a flourishing component industry, with independent engine, transmission and axle manufacturers competing with one another for haulage customers’ business. Cummins and Caterpillar are the leading engine suppliers, for instance, with customers even specifying which brand of ancillary equipment is fitted to the vehicle.
The situation in Europe is generally different, with most manufacturers producing the major components themselves. A high level of “Vertical Integration” means that gearboxes may be supplier sourced, but less so than ten years ago, while it is normal for engines and drive axles to be produced by the vehicle manufacturer. In general, European buyers are not interested in the finer points of engine and driveline comparisons. As long as there is a choice of power outputs and drive axle ratios to suit their needs, customers generally don’t demand any further choice. Fuel consumption, reliability and overall running costs are more likely to influence buying decisions than a choice of engines and driveline components.
Britain was the exception to the rule. In the days of volume truck production there, manufacturers tended to favour the North American model, giving customers the choice of engine and driveline components. Now that truck manufacturers are no longer British owned, the choice has largely gone too, although both the MAN-owned ERF and PACCAR owned Foden still provide a choice for the relatively small number of customers who want it.
Similarly, the further down the weight range in the US, the less likely that the “component truck” model applies. Most US light trucks fit the “Vertical Integration” European model quite well and a number of them are Japanese designs. That said there has been a definite shift on both sides of the Atlantic in recent years.
Common to European and North American freight operations is the way that bodywork is supplied. Since haulage companies have a wide range of needs from bulk waste, tanker operations, and dry freight to refrigerated transport, the bodywork and/or trailer required is purchased or leased separately from the vehicle itself. It may be that the vehicle manufacturer or supplier can arrange to supply the bodywork, but large transport fleets in particular may have an arrangement with a bodybuilder to supply their requirements.
The situation is different in Japan. Truck manufacturers tend to handle the supply of the complete vehicle and bodywork and may be involved in the manufacture of bodywork and trailer.
Market forecast – Europe
Predicting market developments for trucks is not simple. Unlike cars, where manufacturers can develop new market niches to give the ever-hungry consumer even more choice, truck operations are closely linked to economic cycles. Construction vehicles, for instance are a particularly good barometer of a national economy – first to fall when the economy slips back and first to return when the economy picks up again. On the face of it, we have a globally expanding need for transport, which should deliver steady demand for CVs as the most popular and flexible means, but the reality is different.
Europe
Table 1: EU 15 CV registrations (over 3.5t GVW) in units 1999 to 2003) | |||||
| Year | 1999 | 2000 | 2001 | 2002 | 2003 |
| EU 15 total | 352,905 | 361,573 | 347,984 | 313,278 | 308,536 |
| UK | 51,255 | 53,618 | 54,765 | 50,818 | 54,132 |
| Germany | 112,075 | 108,216 | 95,961 | 82,176 | 82,514 |
| Source: ACEA | |||||
Table 2: Top five EU registrations in units 1999 to 2003 | |||||
Manufacturer | 1999 | 2000 | 2001 | 2002 | 2003 |
| DaimlerChrysler | 93,604 | 88,163 | 82,422 | 71,922 | 69,966 |
| Iveco | 54,827 | 57,395 | 54,789 | 55,424 | 49,234 |
| MAN | 45,566 | 49,696 | 49,043 | 38,623 | 40,789 |
| Volvo* | 39,833 | 40,451 | 38,247 | 32,673 | 35,098 |
| Scania* | 35,071 | 38,238 | 32,137 | 28,833 | 30,357 |
| * Renault 5th in 2000, 4th in 2001 and 2002, 6th 2003. Daf 5th 2001, 2002 and 2003. | |||||
| Source: ACEA | |||||
Table 3: Western European CV Production (units > 6.0 tonnes GVW) 1999-2003 | |||||
Production (actual) | 1999 | 2000 | 2001 | 2002 | 2003 |
| Europe | 313,277 | 341,085 | 348,777 | 315,103 | 262,195 |
| Source: just-auto.com | |||||
Table 4: Western European CV Production Forecast (units > 6.0 tonnes GVW) 2004-2009 | ||||||
Production (forecast) | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 |
| Europe | 280,175 | 272,900 | 265,410 | 277,900 | 285,535 | 270,955 |
| Source: just-auto.com | ||||||
ACEA figures show registrations over 3.5 tonnes GVW. Since the weight range between 3.5 tonnes and 7.5 tonnes is relatively unpopular, the figures give a good indication of how the market has moved in Western Europe over the past five years.
Overall, the market peaked in 2000 with a steep decline in 2002 as most EU countries experienced a recession. A corresponding downward adjustment in production followed in 2002. As the figures for two leading EU markets show, the position varied. The UK market was still rising while the EU as a whole was falling but couldn’t resist the downward trend in 2002. For Germany the fall was much more pronounced, tracking the EU fall but showing a weaker recovery in 2003.
From a manufacturers perspective, it is the global leader, DaimlerChrysler that has also maintained the largest sale throughout the period. The registration figures for Europe show the company’s grip on the market, leading it throughout the period, with the same pattern emerging so far this year. In fact the top three manufacturers have maintained their positions, but Renault moved into the top five in 2000, ousting Scania from its fifth place and displacing Volvo from fourth place for the next two years, before slipping back to sixth in 2003. Similarly Daf kept Scania out of fifth place in 2001, pushing Volvo out of the top five the next year, before Volvo returned in 2003, pushing Renault out again.
Although the top three seem to be less influenced by model changes, the arrival of MAN’s TGA model in 2000 helped it to smooth the European downturn, while revisions from Daf and Volvo have doubtless helped sales. But, looking across the Atlantic, there is a clear pattern emerging. DaimlerChrysler and Volvo’s operations on both sides of the Atlantic have given the two manufacturers a powerful position on the global stage, rivalled only by Dongfeng and FAW in China, riding a tidal wave in their home markets.
Casting ahead, we expect to see a steady increase in production for 2004, showing a seven per cent increase on last year, followed by progressive falls in 2005 and 2006, as truck buyers delay Euro-IV purchases. While this will be offset by fiscal incentives for early introduction of Euro-IV models in some States, the higher purchase price for Euro-IV models, not to mention the need for urea additive in the SCR emissions control system, will take their inevitable toll. The 2008 rise will help to supply earlier delayed purchases, with the market stabilising again in 2009.
 | Expert Analysis |  |
This new report is by truck and diesel technology expert John Kendal and commerical vehicle specialist Oliver Dixon. John started his career as a research analyst at the Motor Industry Research Unit (MIRU), working on reports and multi-client studies. In 1990 he became known as the technical expert and writer on the weekly trade title Commercial Motor, before soon moving up to Engineering Editor. During this time John was widely respected for his knowledge of diesel engine developments and became the editor of Diesel Car magazine in 1997. Since then John’s expertise in trucks, diesel engines and technology has been put to good use as a freelance journalist and editor. Co-author Oliver Dixon is an automotive analyst, consultant and journalist specialising in the global commercial vehicle market. He is based in both the UK and the United States. To find out more about this report and to order your copy, please follow this link. |
Global market review of truck manufacturing – forecasts to 2009 |  |
