Daimler knocks Cummins from pole spot

Vertical integration is showing signs of taking a firm grip of Class 8 diesel engine sales in North America as Daimler AG has nudged Cummins Inc. from the top spot in first-half 2016.

The data from WardsAuto.com gives some indication of the trauma being felt in the front office of Columbus, Indiana-based Cummins Inc. which, following the exit of Caterpillar at the end of 2009 from North America’s on-highway diesel engine makers, is the last man standing in North America – the last independent diesel engine maker.

But the figures are not good reading either for Volvo executives in Stockholm, Sweden, and Navistar International Corporation’s chief executive officer, Troy Clarke.

Daimler Trucks North America (DTNA), which includes Detroit Diesel and Mercedes­-Benz brands, recorded sales of 41,996 units in the half year, the highest share at 33.4 per cent. This was out of a total of 125,715 engines in the period, according to WardAuto.com.

This compares with 27.7 per cent out of 165,810 total engines a year earlier or 45,929 units; figures which highlight how the North American market has changed in this period.

In contrast, Cummins Inc., the nation’s only independent commercial vehicle engine manufacturer, moved into second spot with roughly 1,000 fewer engines sold or 40,999 engines, giving the company a 32.6 per cent market share.

Cummins’ share a year earlier was 36.7 per cent or 60,852 units.

A Cummins spokesman admitted the company “continue to experience challenging economic conditions”. And it expects these to continue.

He added, trying to remain positive: “However, we continue to maintain a strong availability across [truck manufacturers] and market position.”

And while, some four years ago, Cummins regained a former customer in the form of Navistar International Corporation, sales to this company are more than offset by lost sales elsewhere. It is nevertheless hoping for increased sales for its ISV5.0 vee diesel in pick-up truck applications (Nissan Titan and others). This engine is the first Cummins production engine to carry a compacted graphite iron (CGI) vee cylinder block.

The only other North American Class 8 truck maker to show a gain was Paccar Inc. Its overall share of total engines rose in the 2016 period rose to 12.4 per cent from 11.3 per cent a year earlier.

It is argued that both Paccar, based in Bellevue, Washington, and Navistar International Corporation, based in Lisle, Illinois, will continue to use the Cummins’ 15 ­-litre engine as these two truck makers do not have their own 15-­litre option. To develop such an engine in-house would be expensive.

And why would they, Cummins claims its ISX15 has an established history as “the transportation industry’s favourite engine for Class 8 trucks”.

                                 Slow-down in the industry

Another market share loser was the Volvo Group. Its share through its two North American subsidiaries, Mack Trucks and Volvo Trucks North America, hit 17.3 per cent, down from 19.5 per cent a year earlier.

“The drop in Cummins­ powered units is a result of the slowdown in the industry, especially in the long-haul segment,” according to John Moore, VTNA product marketing manager for powertrains, who added that Volvo would continue using the units.

A spokesman for Mack Trucks Scott admitted the company uses Cummins’ natural gas-­powered engines and a 9-­litre engine for its Granite MHD model.

“The decrease in Mack’s use of Cummins engines through the first half of 2016 is due to lower demand for natural gas-powered trucks,” he is reported.

Navistar is still weathering the storm left by former boss Daniel Ustian. It claims to have a Class 7-8 engine in the form of the N13, a 12.4-litre diesel engine with a power range of 365 to 475 bhp and a torque range of 1,250 to 1,700 lbft.

But Navistar struggles to compete with DTNA which has three engine offerings from what was Detroit Diesel: the DD13 (a 12.8-litre giving 350-475 bhp and 1,250-1,650 lbft; the DD15 (a 14.8-litre diesel giving 455-505 bhp and 1,550-1,750 lbft) and the DD16 (a 15.6-litre diesel giving 475-600 bhp and 1,850-2,050 lbft torque).

Steve Gilligan, Navistar’s vice president of product and vocational marketing, said bravely that Navistar will have its “fully updated N13 engine” available in its trucks in April.

“We are going to start taking orders for that engine in the December or January timeframe,” he is reported, adding that “the goal with the N13 engine is to provide improved fuel economy comparable to 15­-litre engines.

Navistar’s International Trucks’ market share slipped to 4.2 per cent from 4.9 per cent as volumes fell to 21,213 a year earlier period to 14,230.

Looking at the broader picture going forward. Cummins says weak orders and high dealer inventories have caused it to trim its full-­year forecast for heavy-­duty production to 200,000 units, down from its prior forecast of 210,000.

ACT Research Co., on the other hand, forecasts Cummins and other engine makers will have the opportunity to grow engine volumes even amid changing market shares.

“Truck and engine volumes will begin increasing in 2018 through 2020. We are currently forecasting a downturn in 2021, but the main point is that despite losing share, [Cummins] engine volumes are forecast to increase when the market is increasing,” said Steve Tam, ACT’s vice president of the commercial vehicle sector.