Sharon Clancy looks at how manufacturers of heavyweight vehicles are restructuring their operations in the wake of economic downturns and greater legislative pressure
The 2008 economic crisis decimated global sales of commercial vehicles, particularly in Europe and Latin America. Asia and North America started to recover in 2011 but only in 2012 did manufacturing volumes really start to recover to pre-crisis levels.
Similarly, postponement and curtailment of big-ticket construction projects affected sales of offroad vehicles, a sector that had been particularly strong in the BRIC countries. The one ray of light in all the gloom has been the burgeoning market in buses and coaches, particularly in China and India.
Global manufacturing volumes for trucks, buses and offhighway vehicles are much lower than for passenger cars and vans – Daimler Trucks, the world’s largest producer, aims to produce 500,000 medium and heavy trucks worldwide in 2013, rising to 700,000 by 2020, for example. These lower volumes demands specific manufacturing strategies – truck manufacturers, for example, have cab production facilities not only in separate plants, but sometimes in different counties to the final assembly line. A truck chassis-cab or bus chassis often leaves the plant in knock-down form still needing a body to be attached before it is ready for the road.
Expansion of global brands has led to reorganisation of manufacturing operations to incorporate global expertise on components and systems, as well as vehicle assembly. Powertrains, for example, account for more than half the cost of a truck. Daimler Trucks is aiming for greater synergies with the establishment of a global powertrain division with procurement, manufacturing and engineering integrated into one business unit.
At the same time, there is recognition that a one-size fits all strategy won’t work. This is particularly true in bus and coach sectors and in off-highway, where the range of vehicle types and bodies is vast. So the trend is to combine the technical expertise of the global component and chassis suppliers with local market knowledge and skill sets.
Emissions and operational safety are the two big technology trends. Emissions in Europe and Japan are now aligned, but manufacturers are campaigning for global harmonisation on emissions because it costs them to produce different engines for different markets.
One issue with emissions standards and the reason Euro 3, IV and V engines are in demand in some markets is that the later European and EPA standards rely on availability of low sulphur diesel supplies and these are not always available.
Meeting Euro 6 has required additional components such as diesel particulate filters and Selective Catalyst Reduction technology, which adds to the complexity of manufacturing and requires chassis modifications. In the off-highway market, which has a low-tech tradition to facilitate on-site repairs and maintenance, emissions controls will bring service challenges for operators and manufacturers.
The other big technology trend for buses and off highway is safety in operation. In the buses market this means adoption of safety measures such as ESP anti rollover systems and improvements to driver peripheral vision with cameras. Off-highway cameras are being used to improve site safety.
Western European manufacturers are reducing the number of preferred suppliers to drive efficiencies and giving tier one suppliers a greater role in the design and development of components for new models. At the same time, the expansion of manufacturing in BRIC markets has necessitated those tier one suppliers also develop global plants, both to support the global platforms manufacturers prefer and also to help them ensure the locally manufactured content of the vehicles meets requirements. In China, particularly, demand for locally-produced components in JVs with indigenous manufacturers is high.