Think globally, serve your customers locally

Dutch truck manufacturer DAF Trucks is spreading its wings. It launched the new XF and CF series in the second quarter; it is expanding its markets globally; and is increasing its production steadily. Since last year, DAF Trucks has had an American, Preston Feight, at the helm. GIANENRICO GRIFFINI visited him in Eindhoven and discussed several key topics

Can you outline your position in the European truck market?

We can look back on an excellent year. Our European heavy-duty market share increased from 14,6 percent in 2015 to 15,5 percent last year. DAF is really benefiting from a strong economy, not to mention its excellent products and services, which are really leading the way.

Three years ago we introduced DAF Transport Efficiency. This philosophy aims to continuously reduce the costs of ownership for our customers by reducing fuel consumption and maintenance costs, while at the same time delivering the highest uptime possible.

In addition, 2016 was also the year in which we saw continuous growth in our Paccar Parts business and record sales of more than 4 000 MX-11 and MX-13 engines to third parties, including leading bus and coach builders around the world.

How do you plan to achieve the “right” balance between tractors and rigids?

DAF traditionally performs very strongly in the European market for tractors. That is a big plus, of course, but I want DAF to be dominant in the rigid segment as well, and that is certainly possible.

In the United Kingdom we have a good balance between tractors and rigids and in the Netherlands we also sell a proportionally higher percentage of rigids. I don’t see why we can’t be equally successful everywhere.

Are you going to keep on investing?

It’s one of the strengths of DAF and Paccar: keep investing. In both down cycles and up cycles … always keep investing. Investing is in our genes.

As we speak, we are finalising the construction of our new cab paint shop – a €100 million (R1,556 billion) investment. It’s no exaggeration to say that this paint shop will produce the kind of paint quality usually associated with the best luxury cars. If you own the best truck in the market, you want it to look the best, too.

Other investments include a new large stamping press in our truck factory, the installation of new block and head machining equipment in the engine factory and highly sophisticated gear-grinding installations for the rear-axle differentials. All these investments are being made to further enhance the product quality of our trucks.

At the same time, they reinforce an already excellent working environment for our people. I’m extremely proud of DAF’s workforce – all of those passionate men and women who consistently deliver their very best for our customers.

What feedback have you received from the market regarding the new CF and XF models?

So far, we have had excellent feedback from our customers. The current generations of our Euro-6 DAF CF and XF are not only the most reliable trucks we’ve ever built, but also the most reliable trucks in the market.

In addition, they offer industry-leading fuel efficiency and performance. The challenge our engineers took on was coming up with a new generation of trucks that would set new standards.

This was a significant challenge to say the least, but the result is impressive. The team redesigned the entire powertrain – from the MX-11 and MX-13 engines to the transmission, axles and after-treatment systems.

When driving at cruising speeds, the engines now run at around 1 000 r/min, and from 900 r/min upwards the engines deliver maximum torque. It sounds impressive – and that’s exactly how it drives, too … the combination of silence in the cab, the complete absence of vibrations and the superb power at low revs is guaranteed to put a smile on every driver’s face.

So, the new CF and new XF perform superbly when it comes to driver comfort, but for the owner it is even more important to know that our new trucks deliver seven-percent better fuel economy than the current trucks. That really separates us from the rest of the competition.

To prove this impressive seven-percent improvement, we have been running tests with our customers, which confirm that our new trucks are delivering this fuel efficiency. It’s wonderful to be providing our customers with this significant reduction in operating cost.

What is DAF’s roadmap to lower fuel consumption and CO2?

In general you can say that fuel consumption of our trucks has gone down by an average of about one percent per year over the last decade or so. I think this is a great accomplishment. Keeping the same pace in the future will be a challenge, but we are optimistic.

In order to achieve enhanced fuel efficiency and lower CO2 emissions, we are working with the European Commission to define legislation that enables this performance. One of the key items is new legislation with regard to masses and dimensions. We are looking forward to receiving clear guidelines on what we will be allowed, which will open the way for new truck generations that offer significant aerodynamic and safety advantages.

However, there is low-hanging fruit that could be harvested immediately, like a Europe-wide allowance for the application of longer and heavier vehicles – the eco-combis.

Which new technologies and drivelines look most promising?

Obviously, DAF Trucks is constantly investing in new and promising technologies for the future. The three pillars are electrification/hybridisation, autonomy and connectivity. We are active in all these areas and are working with government officials and our customers to define commercially viable approaches to these technologies.

For example, electric-only vehicles may be able to fill a niche in low-weight class urban environments, but it is debatable whether all-electric powertrains is the right answer for long-haul applications.

Last year, at the IAA in Hanover, we displayed one of our Innovation trucks, illustrating next-generation technologies; such as hybridisation and electrification, autonomous features and connectivity, and we will continue to develop these platforms and opportunities.

What’s your vision of the near future?

Our strategy is simple; if we continue to grow every year we will find ourselves on top. Take a look at our truck production last year, we have to go back to 2008 before we can find numbers like that, and production is still increasing. By the end of the summer, we will ramp up CF and XF production to 216 trucks a day and perhaps we can go to even higher levels as the economy continues to move forward.

The market is strong, freight is moving, diesel prices are low, economical sentiment is positive and MAUT kilometres (distance driven on tolled roads) are at record levels.

Last year the heavy-truck market in the European Union was estimated to comprise just over 300 000 units. We estimate that the 2017 market will be strong again with
290 000 to 310 000 registrations forecast for the total European heavy-duty market.

Do you plan to focus your business more on aftersales revenues in the future?

I read that some brands have decided to focus more on aftersales and services than on the trucks themselves, but we believe it has to be both. A transport business needs the best truck and a partner to take care of that truck as well.

Engineering, building, selling and supporting is an indivisible package to us. We won’t be focusing on only one element; we will focus on all of them.

How do you judge DAF’s presence worldwide?

Paccar is already equipping around 50 percent of its trucks in the United States (US) and Canada with Eindhoven-designed MX-11 and MX-13 engines. That makes us proud.

At the same time, DAF is increasing its footprint around the world. Take a look at Brazil and Australia. In Brazil, we opened a manufacturing facility. We are growing steadily and have just been voted Truck Brand of the Year for the second year in a row.

In Oceania we see opportunities, just like the ones found throughout Asia, Africa and the Middle East. We must think about things globally and serve our customers locally.

DAF will only expand in a way that is both intelligent and makes financial sense; it is not growth just for the sake of growth itself, but growth where it’s a good business idea and supports our customers around the world.

You’ve worked on both sides of the Atlantic. What do you like most of each truck market?

To be honest, there are more similarities than differences. A similarity that I enjoy relates to the people that own and run trucking companies.

Whether they are small or big, based in America, Europe or somewhere else, they are all working hard to keep the economy moving. Their businesses are challenging and complex and require great skill. We view our responsibility as helping them to succeed; so we try to see the business from their perspective as well as from their customers’ perspective.

Of course, there are differences. The US-Canada market can be approached using one strategy. What kind of challenge does Europe present? Well, the Netherlands is not Italy or Spain, and France is not Germany.

It’s not about good or bad, but it is about understanding each market and figuring out how to meet each of our customer’s needs. Nothing is more fun and fulfilling for our team than providing the best trucks and services in the world to each customer in their unique operating environment.

As regular readers of FOCUS know, this magazine has been appointed an associate member of the International Truck of the Year (IToY)! FOCUS is the sole South African magazine to have joined this prestigious body. One of the advantages of this association is access to exclusive articles, specially written for FOCUS by ITOY jury members. This is one such article.