Global truck markets start to recover

In his monthly review of global news for local truckers, FRANK BEETON provides analysis of the 2010 European and East Asian truck markets as they resumed growth, and details Hino’s re-entry to North America with a forward control model range.

Truck sales in Europe kicked off the 2010 calendar year in much the same depressed mood that had prevailed during the global financial crises of 2009, but by the end of the year, volumes, particularly at the heavier end of the mass spectrum, were showing signs of recovery. However, the picture varied considerably across the Gross Vehicle Mass classes and also country by country. This review looks at the full year results for western and central Europe (regional demarcations provided below), and provides comparisons with 2009, which was reported as one of the worst years on record.

In the context of this report, “Western Europe” is made up of France, Germany, Italy, Spain, the United Kingdom, Ireland, Belgium, Luxembourg, the Netherlands, Denmark, Finland, Norway, Sweden, Austria, Switzerland, Portugal and Greece. “Light commercials” are positioned between Gross Vehicle Mass parameters of 3,5 and 6,0 tons, “medium trucks” are defined as those with GVM ratings between 6,1 tons and 15,9 tons, while “heavy trucks” gross at 16 tons and above. There is no distinction, in this mass segmentation model between two-axled and multi-axled units, as European regulations allow the heaviest two-axled models to operate at an all-up mass of 19 tons.

Aggregated sales of 528 757 units across all three categories in this region resulted in year-on-year market growth of 6,3%. Light commercials chalked up 325 618 unit sales in 2010, an improvement of 9% on the category’s 2009 performance, while medium trucks, the smallest category in terms of absolute volume at 48 840 units, lost 1,5%, and heavy trucks with 154 659 units reported, gained 3,5% in the year-on-year comparison. Overall market leader in the LCV grouping was Mercedes-Benz with 21,9% penetration, followed by Ford at 14,1% and Iveco with 13,9%. LCV manufacturers recorded improved year-on-year market share performance for the whole of Western Europe in 2010 including Mercedes-Benz, Renault, PSA Peugeot-Citröen, and Volkswagen, while Iveco, Ford, Fiat Auto (reported separately from stablemate Iveco) and Nissan lost ground. Of the individual national markets, Italy, Denmark and Greece suffered year-on-year losses of -2,3%, -6,1% and -38,6% respectively. All other national markets registered positive growth, ranging from a marginal 1% for Spain to a very substantial 55,5% for Ireland. Mercedes-Benz was the premier brand in Germany, Belgium, Luxembourg, the Netherlands, Denmark, Finland, Norway, Sweden, Austria, Switzerland, Portugal and Greece, whereas Ford led in the United Kingdom and Ireland, Iveco prevailed in Italy and Spain, and Renault scored a home win in France.

In the medium truck category, Mercedes-Benz retained overall market leadership with a reduced penetration of 28,5%, Iveco followed in second place, with 24,2% market share, MAN placed third with 17,0%, and Paccar, through its European brand DAF, recorded 10,3%. Market share performance gains were recorded by Iveco, MAN, Paccar/DAF, Renault and Volvo, while Mercedes-Benz, and its independently-reported affiliate Mitsubishi Fuso, lost ground. Of the individual national markets, Germany, Ireland, Finland and Norway recorded varying margins of positive market growth, while all the others contributed to the decline in the Continent’s aggregated volume performance. The first choices of the individual countries saw Mercedes-Benz prevailing in Germany, Ireland, Belgium, Luxembourg, the Netherlands, Finland, and Norway, Iveco dominating in Italy, Spain, Denmark and Switzerland, MAN leading in Austria, Volvo in front at home in Sweden, Paccar, through its major plant at Leyland in Lancashire, securing UK leadership for DAF, Renault enjoying patriotic support in France, while Japanese-sourced Mitsubishi Fuso continued to lead in Portugal.

At the heavy end of the market, Mercedes-Benz retained market leadership with 22% penetration, ahead of MAN (16,2% share), Paccar/DAF (15%), and Volvo (13,9%). Brands gaining traction in this market during 2010 included Mercedes-Benz, MAN, Paccar and Volvo, while Iveco, Scania and Renault Trucks lost some headway. Of the individual nations, Germany, Spain, the UK and Austria recorded absolute volume growth, while all other markets declined. The rankings in those individual national markets playing host to resident vehicle manufacturers reflected the usual strong preferences for local players, with Mercedes ahead in Germany, Luxembourg, Switzerland and Greece, Iveco in Italy and Spain, Renault (reported separately from parent Volvo) in France, Paccar in the UK, Belgium, the Netherlands and Portugal, Volvo in Denmark and Sweden, and MAN in its “second home” of Austria.

The aggregated situation in Central Europe (Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia and Bulgaria) resulted in an overall truck market volume of 74 653 units, and year-on-year growth of 3,8%, for all vehicles over 2,8 tons GVM (market mass category breakpoints as for Western Europe apart from this lower LCV threshold). In this case, the growth impetus all came from improved heavy truck volumes (23 506 units) which grew by an impressive 46,9% over the 2009 equivalent. By contrast, light commercial volumes fell by a margin of 9,2%, and medium truck sales slipped by 1,9%. The leaders in each category of the combined market were PSA Peugeot-Citröen (lights), Iveco (mediums) and Paccar/DAF (heavies), with segment penetration levels of 18,6%, 31,1% and 18,3% respectively.

Most East Asian Markets in Recovery
Considerably better evidence of market recovery has come from Eastern Asia. This region is made up of Indonesia, Japan, Malaysia, the Philippines, South Korea, Thailand and Vietnam, where sales of commercial vehicles over 2 tons Gross Vehicle Mass grew by 27,6% during 2010, when compared to 2009, with absolute annual volumes of 1 108 386 and 868 798 units respectively. All of the individual constituent markets, with the exception of Vietnam, showed positive year-on-year growth, ranging from 9,2% in Japan, to a very substantial 62,4% in Indonesia.

Of the individual markets, Thailand is the largest of this group in absolute terms, with sales of 403 696 units in 2010, resulting in growth of 45,3% in the year-on-year comparison. This country’s market was dominated by light commercial vehicles (2 to 5 tons GVM), at 95% share, followed by medium trucks (5 to 16 tons GVM) at 2,4%, heavy trucks (over 16 tons GVM) at 1,8% and buses at 0,8%. Thailand has a huge appetite for pick-up type vehicles, and is the principal production location of most “Japanese” brands sold in world markets. Home demand is driven by a long-standing tax incentive structure, and the leadership position in the LCV segment is currently held by Toyota (44,3% penetration), followed by Isuzu with 36,4% share. Prime position in both the medium and heavy truck segments during 2010 was held by Isuzu (51,7% and 48,5% penetration, respectively), while Hino was the clear leader in the bus category with 61,3% share.

The second largest domestic market is found in Japan, totaling 220 382 units in 2010, which was an improvement of 9,2% on the equivalent 2009 return. With its highly popular “Kei Jidosha” mini-vehicles not included in this review, the Japanese market was divided into light commercials (2 to 4,5 tons GVM) at 71,6%, medium trucks (4,5 to 16 tons GVM) at 11,6%, heavy rigid trucks (9,3%), truck-tractors reported separately at 1,7%, and buses (5,8%). During 2010, the LCV segment was led by Toyota (reported separately from Hino) with just less than 40% of the available sales, while Isuzu occupied top position in the medium truck segment with 39,2% share, Hino headed up the heavy rigids with 31,1% penetration, UD was the leading truck-tractor supplier at 31,2%, and Hino also headed up bus sales with 28,3% of the available volume.

Next up in order of magnitude was South Korea with total sales of 184 223 units, an improvement of 13,3% on the 2009 result. The segmentation profile was made up of light commercials (2 to 5 tons GVM) at 80% share, medium trucks (5 to 16 tons GVM) at 9%, heavy trucks – over 16 tons GVM (4,3%), and a relatively large bus segment (6,6%). Hyundai remains very much the dominant manufacturer in this market, with leading shares of 70% in LCV’s, 82% in medium trucks, 73% in heavy trucks, and 68% in buses. It was also notable that Tata Daewoo, Hyundai’s main competitor in the MCV and HCV segments, suffered losses in penetration during 2010, despite the launch during the year of its new Prima “global truck” range. Segment shares fell from 20% to 17,7% in the MCV category, and from 34,3% to 27,3% in the group containing maximum payload vehicles.

Indonesia had the fourth largest East Asian CV market in 2010, with 158 743 unit sales, and returned the most impressive year-on-year growth margin of 62,4%. Indonesia divides its market into six segments, these being pick-ups (2 to 5 tons GVM) which make up 17,6% of the total, other light commercials within the same GVM parameters (14,6%), medium trucks (5 to 16 tons GVM), the largest category at 58%, heavy rigid trucks (over 16 tons GVM − 7,2%), truck-tractors of more than 16 tons GVM (1,2%), and buses (1,5%). The individual segment leading manufacturers were Toyota in the pick-up category (27,5%)  Mitsubishi, dominant with its forward-control L300 Series at 88,9% of the “other LCV” category, Mitsubishi Fuso in the voluminous medium truck grouping (52,3%), and Hino as clear leader in the heavy rigid, truck-tractor and bus segments (65,2%, 56,5% and 54,7% segment shares respectively).

There is a significant step down in terms of market size to the three remaining territories in this group. Malaysia is next up at 63 861 units, having grown its market by 19,2% in the 2010 vs 2009 year-on-year comparison. The largest Malaysian market segment was for pick-ups at 60,5% of the total volume, followed by light commercials (2 to 5 tons GVM − 33,6%), medium trucks (5 to16 tons GVM – 1,6%), heavy rigid trucks (over 16 tons GVM – 1,6%), dedicated truck-tractors over 16 tons GVM (1%), and buses at 1,7%. Individual categories were led by Toyota (pick-ups – 48,2% share), locally manufactured Hicom-badged Isuzus (LCV − 19,9%), UD Trucks (MCV − 32,2%) Hino (heavy rigid trucks − 58,4%), Scania (truck-tractors − 26%) and Hino (buses − 39%).

Vietnam’s national 2010 sales volume of 45 230 units generated the only negative year-on-year growth (-6,9%) within the set of countries covered in this review. This market’s GVM-based segmentation model broadly follows regional convention, but does not include a discrete category for truck-tractors. The pick-up segment was relatively small, accounting for only 7,5% of the total market, and was dwarfed by the “other LCV 2 to 5 tons GVM” and 5 to 16 tons GVM MCV segments (48,3 and 32,5% market participation respectively). The balance of the market comprised a relatively small heavy truck category (2,4%), while buses made up 9,4% of the total. Toyota accounted for 35,5% of 2010 pick-up sales, while the “other LCV” segment was led by Kia models with 36,8% share, local company Truong Hai with its Thaco-Foton brand took 40% of the medium truck and 55,9% of the heavy truck categories, and bus sales were led by local company Vina Motor with 68,8% share.

Finally, the Philippines rounds off this 2010 review of East Asian markets with its
32 251 unit total, an improvement of 20,6% on its performance of one year earlier. The segmentation model includes pick-ups (47,8% of the total), other light commercials with GVMs in the 2 to 5 ton range (44,1%), medium trucks (5 to 16 tons GVM – 7,1%), and small segments for heavy trucks (over 16 tons GVM – 0,6%) and buses/coaches (0,5%). Toyota’ Hilux was the best-selling pick-up with 28% of its segment, Mitsubishi’s L300 led the “other LCV” segment with 43,1%, Isuzu headed up MCV sales with a share of slightly more than 50%, MAN was the best-selling HCV brand with 70%, and Hino led the bus and coach segment with 62,1% of the available business.

Hino’s New (Cabover) American
Hino is currently launching a new truck range into the Class 4 & 5 segments of the United States market, bracketing the GVM spectrum from 6364 to 8864 kg. The new models, designated 155 and 195, are the first cab-over-engine (forward control) trucks that Hino has offered in North America since 2004, and feature a wide cab, in a design not seen before, and 840 mm wide chassis frames. The standard driveline specification includes a 210 hp (160 kW) J05 4-cylinder diesel, using both Selective Catalytic Reduction and a Diesel Particulate Filter to meet the EPA2010 emission standard, driving through a 6-speed Aisin A465 fully automatic transmission. These models will also be available with crew cabs and a third generation Hino parallel hybrid system which places an electric motor/generator between the engine and transmission, is able to blend diesel and electric power to optimise fuel consumption, and shuts down the diesel engine at a full stop, restarting the engine when the brake is released. Electrical power obtained from the regenerative braking system is stored in NiMH batteries with an 8 to 10 year design life, which, together with the electric motor and other hybrid components, increase the truck’s tare mass by 200 kg.

The reintroduction of COE models to the Hino North American lineup was unexpected, following the earlier introduction of a six-model “North American Project” medium truck range using a normal control (bonneted) cab specially adapted from the forward-control 500 Series cruiserweight series. The NAP concept responded to traditional US operator preference for “conventional” distribution trucks, as well as standardised driveline components from Hendrickson, Allison, Dana and Eaton. It could be that continuous recent exposure to “global” products from other foreign-owned truckmakers such as Daimler and Volvo is making the US market more receptive to forward control designs. If this is the case, it will be interesting to see if the trend carries into the premium Class 8 segment, where driver prejudice has effectively killed off American demand for COE units.

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