Crafter goes to Poland, but Sprinter stays in Germany
In his monthly review of global news for local truckers, FRANK BEETON clarifies the situation regarding VW’s Crafter and Mercedes-Benz’s Sprinter, reviews the 2013 results from East Asian markets, and updates Paccar’s North American progress with its own engines.
Towards the end of 2012, Global Focus delved into the cooperative arrangement between Daimler and Volkswagen (VW) AG, in terms of which the Volkswagen Crafter and Mercedes-Benz Sprinter integral van ranges were built using the same basic structure, but with unique drivetrains supplied by each of the respective partners.
We recalled that the Crafter had its origins in VW’s LT models, which were first introduced in 1975, while Mercedes-Benz had entered the programme with its spun-off Sprinter range, using its own driveline aggregates, from 1995.
The current arrangement, which runs until 2016, has Crafters built alongside Sprinters at Daimler’s Düsseldorf plant, but we had noted pronouncements, from both partners, that seemed to indicate an upcoming change in the arrangements after the expiry of the present contract.
Initially, it seemed that VW was keen to build its own unique vans in conjunction with affiliated truck manufacturer MAN, as part of its evolving strategy to expand the Group’s global commercial vehicle interests, but Daimler’s first choice was to extend the partnership with Volkswagen beyond 2016.
However, in September 2013, Mercedes-Benz Vans announced a clear and unequivocal commitment to “go it alone”, with no extension of the VW contract beyond the end of 2016. Production of the next-generation Sprinter would continue at Mercedes-Benz’s plants at Düsseldorf and Ludwigsfelde, while “offshore” production would persist in Argentina, China and Russia, with completely knocked down (CKD) assembly in North America.
Subsequently, in March, VW announced its own arrangements. The successor to the current Crafter model is to be built in a new plant located at Września, in Poland, from the second half of 2016. This new plant, which includes a body shop, paint shop and final assembly operations, will cover some 220 hectares and create some 2 300 new job opportunities.
Notably, VW’s Caddy light vans have also been built in Poland, at Poznań, for more than a decade, and the infrastructure that has been developed to support that plant will also be utilised by the new Crafter operation.
Much of the rationale behind this “parting of the ways” between Daimler and VW apparently lies in the latter’s desire to expand its commercial vehicle business. Last month we reported on developments with regard to VW’s ownership of Scania, and the reported intent for closer cooperation between the Swedish company and MAN.
The Volkswagen Group has, through acquisitions, become a potential world leader in the commercial vehicle field, and this places it into direct confrontation with the current global Number One, Daimler, which has its own extensive and very wide-ranging trucking interests. Under these circumstances, cooperation with the main rival has become highly undesirable in the eyes of VW’s management.
No indication has yet emerged if the next generation Sprinter will have anything in common with equivalent van products from the Renault-Nissan axis. Daimler has continued to expand its strategic cooperation with the Franco-Japanese alliance, and its Renault Master and Nissan NV400 van families share market space with both the Sprinter and Crafter families.
One significant difference is that the Renault/Nissan models are basically front-wheel drive, while the current VW and Mercedes products drive at the rear. Daimler, one would assume, would want to retain its own powertrain in any future cooperative venture and this may argue against a potential van link-up with Renault-Nissan. We will be watching future developments with keen interest.
East Asian markets experience mixed fortunes in 2013
While much attention has been focused on the economic difficulties being experienced in Europe; similar problems are not unknown in other parts of the world. Collectively, the region known as East Asia, which is made up of Indonesia, Japan, Malaysia, the Philippines, South Korea, Thailand and Vietnam, suffered a 3,4 percent aggregated market decline in the sales of commercial vehicles (CVs) over two-tonnes gross vehicle mass (GVM) in 2013, compared to the equivalent 2012 outcome.
This was reflected in an absolute cumulative 2013 volume of 1 632 401 units, compared to the equivalent total of 1 689 703 recorded one year earlier. However, this decline was caused by an 11,7 percent drop in Thailand’s total sales, and a 3,5 percent reduction in Indonesia’s volume, while all the other countries returned some measure of market growth.
Of the individual markets, Thailand is the largest of this group in terms of volume, with sales of 645 917 units in 2013. As stated above, this result deteriorated in comparison with the previous year’s result by a margin of 11,7 percent. The Thai market was dominated by pickup trucks, with 89 percent share, followed by other light-commercial vehicles (LCVs) (two- to six-tonnes GVM) at four percent, medium commercial vehicles (MCVs) (six- to 16-tonnes GVM) at 3,2 percent, heavy commercial vehicles (MCVs) (over 16-tonnes GVM) at 3,6 percent and buses at 0,1 percent.
Thailand has a huge appetite for pickup-type vehicles, and is the principal production location of most brands sold in world markets. The leadership position in the pickup segment during 2013 was held by Toyota with a 40,3 percent penetration, followed by Isuzu with 31,6 percent share.
Toyota also led the “other LCV” segment with its HiAce and Alphard (bonneted minibus) models at 71,8 percent share, while the leadership position in both the MCV and HCV segments during 2013 was held by Isuzu with 53,8 percent and 43,3 percent penetration, respectively. Scania was the clear leader in Thailand’s bus category with 49,3 percent share.
The second largest East Asian market is that of Japan, where 390 405 units were sold in 2013; this being an improvement of 3,9 percent on the equivalent 2012 return (this total excludes the highly popular “Kei Jidosha” class of mini vehicles with GVMs of less than two tonnes).
The Japanese market was divided into LCVs (two to 4,5 tonnes GVM) at 60,4 percent, MCVs and HCVs (above 4,5 tonnes GVM) at 36,7 percent, and buses/coaches at 2,9 percent.
During 2013, the LCV segment was led by Toyota (reported separately from Hino) with 52,6 percent of the available sales, while Isuzu occupied top position in the MCV/HCV segment with 33,6 percent share, and Toyota also headed up bus sales, capturing 36,4 percent of the available volume with its Coaster midibus range.
Next up, in order of magnitude, was South Korea with total sales of 226 507 units, an improvement of 2,3 percent on the 2012 result. The segmentation profile was made up of LCVs (two- to five-tonnes GVM) at
79,1 percent share, MCVs (five- to 16-tonnes GVM) at 6,7 percent, HCVs (over 16 tonnes GVM) at two percent, special purpose vehicles (SPVs) (undefined, but mainly government purchases) 6,5 percent and a substantial bus segment of 5,6 percent.
Hyundai was very much the dominant manufacturer in its home market, with leading shares of 77,5 percent in LCVs, 76,4 percent in MCVs, 59,4 percent in HCVs, and 61 percent in buses, while associated manufacturer Kia was the dominant player in the SPV category with 87,5 percent of the deliveries.
Indonesia owned the fourth-largest East Asian commercial vehicle market in 2013, with 207 744 unit sales, this being 3,5 percent less than the equivalent 2012 outcome, as noted in the opening paragraph.
This country divides its market into six segments, these being: pickups (two-to five-tonnes GVM) which made up 15,7 percent of the 2013 total, other LCVs within the same GVM parameters at 15,4 percent, a very substantial MCV (five- to 16-tonnes GVM) category at 56,5 percent, HCVs (over 16 tonnes GVM) at 8,7 percent, truck tractors (of more than 16-tonnes GVM) at 1,7 percent, and buses at two percent.
The individual segment-leading manufacturers were Toyota in the pickup category at 43,3 percent, Mitsubishi, dominant with its forward-control L300 Series at 88,5 percent of the “other LCV” category, Mitsubishi Fuso (in the voluminous MCV grouping) at 52,1 percent, and Hino as clear leader in the HCV, truck tractor and bus segments at 62,7 percent, 51,1 percent and 43,0 percent segment shares respectively.
There is a substantial step down in terms of market size to the three remaining countries in the East Asian grouping. Malaysia is next up at 82 079 units, having grown its market by 3,8 percent in the 2013 versus 2012 year-on-year comparison.
The largest Malaysian market segment was for pickups at 63,6 percent of the total volume, followed by other LCVs (two- to five-tonnes GVM) at 29,5 percent, MCVs (five- to 16 tonnes GVM) at 2,1 percent, HCVs (over 16-tonnes GVM) at 3,7 percent, and buses at one percent.
Individual categories were led by Toyota with pickups at 52,6 percent share, Hino LCVs at 22,6 percent, Isuzu with MCVs at 36,8 percent, Hino with HCVs at 24,2 percent, and Hino buses at 42,7 percent.
The Philippines follows with a 2013 total volume of 47 954 units, an improvement of 20 percent on the country’s performance of one year earlier. The segmentation model included pickups at 43,2 percent of the total, other LCVs (with GVMs in the two- to five-tonne range) at 46,8 percent, MCVs (five- to 16-tonnes GVM) at 6,8 percent, and numerically small segments for HCVs (over 16 tonnes GVM) at one percent and buses/coaches at 2,3 percent.
Toyota’s Hilux was the best-selling pickup with 32,6 percent of its segment, Mitsubishi’s L300 led the “other LCV” segment with
30,3 percent, Isuzu headed up MCV sales with a share of 77,6 percent, European manufacturer MAN headed up the HCV segment with 40,8 percent, and Hino led the bus and coach category with 44,3 percent of the available business.
Vietnam rounds off this 2013 review of East Asian markets with its 31 795 unit total reflecting growth of 11,2 percent when compared to the equivalent 2012 result. This country’s GVM-based segmentation model includes a pickup category accounting for 15,4 percent of the total market, “other” LCVs (in the two- to six-tonne GVM range) at 51,4 percent of the total, and MCVs (six- to 16-tonnes GVM) at 19,6 percent. The balance of the market comprised a relatively small heavy truck category at 1,8 percent, while buses made up 11,8 percent of the total.
Ford accounted for 37,3 percent of 2013 pickup sales with its Ranger model, while the “other LCV” segment was led by Truong Hai-branded Kia products with 52,3 percent share. In the MCV category, Truong Hai-branded Foton models accounted for 50,6 percent of the available business, while Hino headed up HCV sales with 64 percent share. Bus and coach sales were led by local company Vinamotor with 46 percent penetration.
Economic conditions are reported to have deteriorated in both Thailand and Malaysia during the fourth quarter of 2013; the former due mainly to political unrest and the ending of the government’s first-time buyer incentives.
The other countries in the region experienced varying levels of demand growth in the fourth quarter, which augurs well for an improvement in overall performance during 2014. It was notable that the Japanese government’s recent fiscal policies, which were aimed at restoring some measure of inflation to its domestic economy, have apparently worked in favour of commercial vehicle sales.
This report reinforces the desirability of uniform market categorisation in countries making up geographic regions, which would allow for even more meaningful analysis of results and trends.
PACCAR pushes its own engines in the United States (US)
One of the most persistent topics to occupy Global Focus, since it first appeared at the beginning of 2006, has been the efforts made by truck manufacturers to change the long-entrenched buying habits of American truckers.
While their (somewhat contrary) insistence on bonneted, or “conventional” cabs persists, the fact that most suppliers to that market are now European-owned, or have considerable business interests on that continent, has prompted a shift away from “kit trucks” with standardised driveline components, historically brought in from the likes of Cummins, Detroit Diesel, Caterpillar, Eaton/Fuller, Spicer, ArvinMeritor and Dana, to wider acceptance of vertically integrated specifications where the truck manufacturer’s own engines, gearboxes and axles are accepted.
In our first column, we included an article on the subject headed “Paccar: A change of direction”, which spoke about indications that Paccar Inc., the major US-owned and controlled truck manufacturing conglomerate, was about to follow this trend.
The first clue was the emergence, during 2004, of DAF’s new 12,9-litre engine with prominent Paccar branding (Paccar had acquired Dutch manufacturer DAF, complete with its engine building capability, in 1996). Since then, Paccar commenced building these engines in Columbus, Mississippi in 2010, and has been listing them as the “baseline” specification choice in Peterbilt and Kenworth products for the North American market.
While the major suppliers to the US market have retained some bought-in options, most are encouraging the move towards vertical integration through their marketing efforts. Navistar International has been obliged to back off somewhat, due to recent emission compliance issues with its own engines, and was obliged to elicit help from Cummins to sustain its volume business.
The Volvo, Daimler and Paccar groupings, however, continue to champion their own power units, and although it has been difficult to gauge their exact levels of success, news snippets have come through, from time to time, indicating that the direction is positive.
For example, in announcing their record-breaking group financial results earlier this year, Paccar reported that it had installed more than 51 000 MX-13 engines in Peterbilt and Kenworth trucks for the North American market since US-based production began, and that 37 percent of all Kenworth and Peterbilt units built during the month of December, 2013, were fitted with these in-house power units.
For the record, Paccar’s North American sales in 2013 totalled nearly 60 000 Class 8 units, and this evidence suggests a cumulative penetration of around 30 percent for its own engines, although this is likely to have grown progressively since 2010. Paccar will add the recently introduced 11-litre MX engine variant to its North American line-up during the current year.
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.