Rocks for Arocs!

In his monthly review of global news for local truckers, FRANK BEETON examines the third new member of Mercedes-Benz heavy-duty truck family, and is surprised by the choice of name; looks at two more interesting developments from Ford’s increasingly important commercial side; ponders on the happenings at Navistar International; and digs into corporate developments at Volvo that promise to rewrite the global pecking order.

Back in August 2011, when Global Focus first reported that the new Mercedes-Benz Actros heavy duty flagship, had been unveiled by Daimler Trucks, we noted the  firm statement by the manufacturer that the name would apply only to long-distance premium-haul models, and that construction and short-haul applications would be served by different nameplates.

Subsequently, in May 2012, the second nameplate, Antos, emerged with the announcement of the short-haul rigid and truck-tractor distribution members of the family. At the time, we expressed the expectation that the previously used “Axor” appellation would most likely be kept back for the still-to-be-announced construction range, it being a suitably strong and powerful name that had formerly been applied to a successful line of products.

On further reflection, however, we noted that the current Axor range, originally developed in Turkey and Brazil, occupied a specific space in numerous emerging markets, and formed the basis for Daimler’s expanded involvement in the Indian and Russian truck markets. It now seems very likely, therefore, that Axor will continue alongside the new European line-up, so the name would not have been available for a new European range.

The complete European strategy finally emerged when the third model range was announced last November, carrying the name “Arocs”, which was immediately recognisable as a badge providing an association with the typical loads that these trucks have been created to convey. As was the case with both the Antos and the recently-announced Mercedes-Benz Citan van, we have had to rely on somewhat dramatic artists’ impressions to gain our first clues as to the appearance of the Arocs range. Presumably, this will have to suffice until the range is launched to the public at the Bauma trade fair in Munich during April. However, perusal of the available images reveals a logical progression of the styling theme established by the new Actros, and continued by the Antos. Main points of difference exhibited by the Arocs include a higher cab datum, and a more aggressive “teeth” pattern set into the radiator grille.

The Arocs range will consist of rigid trucks and truck-tractors suitable for both on- and off-road construction-related applications, including dumpers, concrete mixers, and dropside freight carriers. The “Loader” 4×2 tractor and 32-tonne Gross Vehicle Mass 8×4 mixer variants are payload optimised with reduced tare mass, while the “Grounder” models are tailored to handle the most severe operating conditions. Chassis configurations include two-, three- and four-axle layouts, and driveline options will cover the entire spectrum from 4×2 to 8×8.

Special configurations to be offered include twin-steer, all-wheel drive units, single-steer trucks with tridem rear bogies, and a single-tyre tandem drive bogie optimised for concrete agitator applications. Two cab widths, 2,3 and 2,5 metres will be available, and these can be specified in three lengths, while the feature list includes steel bumper elements, a radiator guard, and fold-away entry steps.

Power will be provided by 16 Euro 6-compatible engine variations ranging from 175 kW (238 hp) to 466 kW (625 hp). This in-line 6-cylinder BlueTec 6 engine line-up will be available in 7,7-, 10,7-, 12,8- and 15,6-litre displacements, the latter being the initial European OM 473 version of the largest member of Daimler’s global heavy-duty engine family. This engine, which churns out a prodigious 3 000 Nm of torque, will also be available as an option in the new Actros from December 2014. The 15,6-litre capacity matches the Detroit Diesel DD16 variant of the HDEP engine family, which is already available with ratings up to 450 kW (600 hp) in North America.

Standard transmission in the Arocs family is the Mercedes-Benz PowerShift 3 automated unit, with shift programmes tailored to suit individual applications.

Ford’s commercial developments

Our recent focus on Ford’s apparently renewed interest in commercial vehicles has carried over into the new year, and was further encouraged by two interesting pieces of news that have recently emerged. Firstly, there was the welcome announcement that the Ford Motor Company of Southern Africa’s Struandale Plant, in Port Elizabeth, was to supply 3,2-litre, 5-cylinder Power Stroke diesels for fitment in United States’ market
Transit vans.

As we reported last year, Ford took the decision to replace the long-serving and highly successful E-Series (formerly Econoline) integral van from 2014 with the new generation European Transit in North America. Transits for the American market will be built at Ford’s Kansas City plant from late 2013, and offered with naturally aspirated 3,7-litre or turbocharged 3,5-litre petrol V6 engines, as well as the South African-sourced diesel unit.

The Port Elizabeth-built 3,2-litre diesel, which also carries Duratorq branding, is the top power option offered locally in the successful new Ranger pickup, which is assembled at Ford’s Silvertonne plant, outside Pretoria. The Ranger is Ford’s global bakkie for all regions except North America, where its F-150 “full-size pickup” has reportedly been the best-selling individual vehicle model, including all passenger cars, for 31 years. The long-term success of this product, and its importance to Ford’s fortunes, made the appearance of the Ford Atlas concept at the recent North American International Auto Show in Detroit extremely newsworthy.

American vehicle manufacturers will be required to meet extremely demanding Federal average fuel-economy standards over the next decade, and their purchasing public’s liking for big, beefy pickups (borne out by the F-150’s overall market leadership) will make it even more challenging to achieve these. The Atlas is thus very important in illustrating new directions that Ford is advocating, from the 2015 model year, to make its full-size pickups more fuel-efficient.

Some of the features shown were largely evolutionary, and these included; lightweight leather-covered slimline seating; automatic engine stop-start (disabled when towing); smaller displacement direct-injection and turbocharged EcoBoost petrol engines; active grille shutters that close automatically to improve aerodynamic efficiency when less engine cooling is required; active wheel centre shutters that close at speed to enhance streamlining; a retractable front air spoiler that lowers to improve underbody airflow at cruising speed, but raises to improve the approach angle when required, and power running boards that retract out of the airstream when not needed to assist entry.

There were also numerous other “nice-to-haves” that made no direct contribution to fuel efficiency, but were aimed at improving the utility experience. These included a dual-purpose tailgate step/cargo cradle, trailer backup and dynamic hitch assists, 360° vehicle proximity camera, LED lighting, and hidden rear ramps for loading wheeled cargo.

However, potentially the most significant feature of Ford’s future pickup family was not listed in the official show blurb, but enjoyed plenty of media discussion during the run-up to the show, and was mentioned in management presentations at the show. This involves the extensive use of lightweight materials, including aluminium, in the construction of these vehicles. Media speculation was that future F-150 generations will have their entire cabs and load boxes fashioned from aluminium, while only the chassis frames will be made of steel. Despite the manufacturing challenges associated with aluminium, and its higher cost (reportedly about four times that of steel), observers firmly believe that this material will become more prevalent as manufacturers get to grips with increasingly stringent economy and emissions standards.

Commercial users are sure to ask questions about the potential durability of aluminium load beds, and this may eventually lead to some innovative solutions involving composite construction, although the champions of aluminium point to its extensive successful usage in military vehicle applications. Arch-rival General Motors has reportedly opted for aluminium in engine blocks and bonnets in its latest equivalent commercial products, but has retained steel for cab and bodywork structures.

There is sure to be much debate over the relative merits of the two design philosophies, but it is clear that “more of the same” will not be good enough, considering the magnitude of the fuel consumption task that looms ahead. It is also quite possible that some of the solutions developed for this class of vehicles will migrate upwards along the payload scale, and Ford is expected to selectively extend its chosen design philosophy to the heavier Super Duty F-250 and F-350 models. Readers are advised to keep a close watch on future developments influencing this interesting topic.

Navistar exits Indian joint ventures

Navistar International Corporation has reportedly sold off its interests in Mahindra Navistar Automotives Limited (MNAL), and Mahindra Navistar Engines (Private) Limited (MNEPL), giving its erstwhile Indian partner, Mahindra & Mahindra Limited, full ownership of both companies. The agreement covering the sale, which is awaiting regulatory approval, will allow Navistar to continue purchasing components in India, and procuring engineering services from Mahindra, while maintaining a licensing arrangement in support of the MNAL and MNEPL operations.

The association between Navistar International and Mahindra dates back to 2005, while the joint production of engines has been proceeding since 2010. Early in that same year, MNAL launched its first new products aimed specifically at the Indian market, these being rigid trucks and truck-tractors ranging from 25-tonnes GVM to 49-tonnes Gross Combination Mass.

One of the most striking features of this new range was its all-new forward-control cab, the development of which was considered essential for the success of MNAL’s products in the Indian market, and their export potential to countries like South Africa, where the regulatory environment and operator preference dictates the availability of this layout. It was, therefore, highly significant that the local International operation (since renamed NC² Trucks SA) exhibited examples of this cab on promised new MetroStar HCV (8,5- to 16,5-tonne GVM) category models at the 2011 Johannesburg International Motor Show.

The imminent availability of MetroStar was obviously of considerable strategic importance to the Navistar International brand in South Africa, providing a greatly expanded market coverage footprint, and the prospect of substantially increased local sales volumes. Mahindra has subsequently announced that it is to invest around US$40 million over the next three years to maintain and upgrade the products developed by the former JV, including the launch of a bus chassis, and trucks in the 9- to 16-tonne GVM range. Production is being undertaken at a 700-acre greenfield plant at Chakan, near Pune, and rapid indigenisation of this range, to a level approaching 100 percent local content, is a key element in the MNAL strategy. It remains to be seen, therefore, if Navistar’s South African operation will continue with the local introduction of these products, sourced from a company that is now independent of any direct investment from its US parent, or if Mahindra will choose to market the product locally, for its own account.

Renault sells last Volvo Shares, and Volvo buys into Dongfeng Commercial Vehicles

Another interesting transaction reported in the media towards the end of 2012 was the sale, for US$1,92 billion, of Renault SA’s last remaining shareholding in the truck-manufacturing group, AB Volvo. After forming a global alliance with Nissan in 1999, Renault sold its corporate truck interests to Volvo in 2001, and acquired a 20 percent shareholding in the Swedish company. Volvo was then tasked with managing the global trucking interests of the Renault-Nissan alliance, comprising Mack in the United States, and Renault’s RVI (Renault Vehicules Industriels) operation.

Volvo subsequently also acquired Nissan Diesel in 2006, renaming the former Nissan associate UD Trucks Corporation in 2010. During 2010, the Renault-Nissan consortium substantially scaled down its shareholding in the Volvo Group, but remained the controlling shareholder with 6,8 percent of its share capital and 17,5 percent of its voting rights. Now, it has sold off all of its remaining shares, which reportedly will allow Renault to reduce its corporate debt (reported at €818 million in June 2012), and make new investments in France, Russia and China.

This means that there is no longer any equity-holding or potentially controlling relationship between Renault-Nissan and the Volvo Group.  The major shareholder in the Volvo Group is now Swedish holding company Industrivaerden AB, with 6,2 percent of the share capital and 18,7 percent of the voting rights. So, does that take Renault-Nissan completely out of the trucking business? Not really, because Nissan and Renault still have their European integral vans and spun-off freight carrier models, while Nissan has been busy expanding its global involvement with light commercials, including the Cabstar/Atlas light truck with GVM ratings ranging from 1,5 to 5,4 tonnes. And, of course, there is that strange Spanish-built Nissan Atleon LHD truck range with GVM ratings between 3,5 and 8 tonnes, that is currently being refreshed with a €100 million investment!

This ending of equity-based ties between Renault SA and AB Volvo may have raised some questions about continuity in the latter’s Chinese interests. Up to now, these had been channelled through Volvo’s 100 percent ownership of UD Trucks, which held a downstream 50 percent share in the Dongfeng Nissan Diesel joint venture, as well as some bus-related cooperation with Shanghai Automotive Industry Corporation, but Volvo has moved quickly to establish a new relationship with Dongfeng, that has the potential to rewrite the pecking order in the global truck market.

In an announcement dated January 25, AB Volvo revealed that it had signed an agreement with Dongfeng Motor Group Company Limited that will lead to the Swedish company taking a 45 percent share in a new DFG subsidiary, Dongfeng Commercial Vehicles, which will control the major part of DFG’s medium- and heavy-duty commercial vehicle business. The acquisition is reported to have cost more than US$890 million.

DFG recently agreed to purchase the trucking portion of the Renault/Nissan Dongeng joint venture known as the Dongfeng Motor Company Limited, and will add most of these models to the DFCV portfolio. During 2011, this portfolio accounted for 17 percent of China’s medium-duty market (6- to 14-tonnes GVM), and 16 percent of the heavy-duty market (over 14-tonnes GVM). Volvo claims that the cumulative total 2011 production of 424 000 units by its own and DFCV-designated operations would have placed the new Volvo-led consortium at the head of the global medium- and heavy-duty truck market.

The objectives being set for the new Volvo/DFCV alliance include: maintaining a strong, established presence, including sales and service outlets in the Chinese truck market;  shared development costs; pooled Chinese purchasing/sourcing arrangements; globalisation of the Dongfeng brand and the development of export business. It is now the world’s largest technology co-operation in transmissions, engines, and components.

The process of concluding the agreement, including regulatory approvals, is expected to be completed over the next twelve months. Volvo will provide four members of the eight-man management team, and three members of the seven-man board of directors.

This announcement underpins a long-held Global Focus opinion that the most effective route for Chinese truck manufacturers into export markets would be through alliances with established global partners. The use of existing marketing and product-support networks will make the conquest of sceptical overseas markets that much easier, while managing and controlling the risk of operators wishing to try out Chinese products.

The products to be included in the DFCV portfolio include the Kinland and Kingrun products already present in South Africa, and it will be interesting to see if the present distribution arrangements for these vehicles will persist under the new regime. It is also possible that the Dongfeng connection may provide other members of the Volvo family with sorely needed new products at the lower end of the medium-duty payload spectrum, now that the likelihood of sourcing suitable vehicles from within the Nissan family seems to have become more remote.

Finally, there could be some benefit for Dongfeng in playing down the Japanese connection previously inherent in Dong Feng Nissan Diesel. The long-running dispute that exists between Japan and China over the Senkaku/Diaoyu Islands recently erupted into anti-Japanese sentiment in China. It included damaging of Japanese cars and destroying shops, and has resulted in Japanese vehicle brands suffering drastically reduced sales in China. Under these circumstances, a closer association with Volvo could be a more desirable public relations proposition.

Global FOCUS is a monthly update of international news relating to the commercial vehicle industry. It is compiled exclusively for FOCUS by Frank Beeton of Econometrix.