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Daimler Trucks North America Supports New 2017 Truck Show Heavy Duty Trucking / May 23, 2016 Daimler Trucks North America has signed a letter of intent to exhibit at the inaugural The North American Commercial Vehicle (NACV) Show, a new bi-annual trucking show to be held September 2017 at the Georgia Congress Center in downtown Atlanta, Ga. The company has agreed to exhibit at the Sept. 18-22, 2017, event, as well as at the 2019 & 2021 NACV Shows. DTNA also joins the NACV Show exhibitor advisory committee. DTNA last year announced it would not exhibit at the Mid-America Trucking Show in 2016 because it preferred an every-other-year format running in odd years opposite the big IAA Commercial Vehicles show in Hannover, Germany, which is held each September in the even numbered years. The NACV Show, first announced in April, fits the bill, DTNA says. “Daimler Trucks North America has diligently reviewed numerous concepts and proposals for the next evolution in shows and exhibitions in the North American commercial vehicle market, and we have chosen the North American Commercial Vehicle (NACV) Show as the one commercial vehicle event that can meet our business goals and needs,” said DTNA President & CEO Martin Daum. “The NACV Show is the perfect platform for Daimler Trucks North America to connect with our suppliers and fleet customers, launch new products and meet with industry press." However, this does not mean that individual DTNA brands, such as Freightliner, Western Star or Detroit, may not still exhibit at MATS. “Our choice to sign a letter of intent for the NACV has no connection to other annual regional shows," noted David Giroux, director of corporate communications and corporate marketing for DTNA. "Attendance at regional shows – such as MATS or GATS – by local dealers or individual brands will be at their discretion. We will not be attending these shows on a collective corporate basis. The NACV will be a showcase for technologies and innovations across all Daimler Truck brands operating in North America." The NACV Show is organized and managed jointly by Newcom Media USA and Hannover Fairs USA. Newcom, a major Canadian B2B publisher, puts on the Truck World and ExpoCam trade shows. Hannover Fairs USA develops and manages marketing programs at Deutsche Messe events in Hannover, Germany, and the United States, as well as in emerging markets such as China, India and Turkey. IAA is hosted by Deutsche Messe and owned by VDA (Verband der Automobilindustrie e.V.). Deutsche Messe also organizes China Commercial Vehicle held in Wuhan, China. Unclear at this point is the fate of a second effort to establish a new North American trucking show that will alternate years with IAA. In March, the American Trucking Associations, along with the Heavy Duty Manufacturers Association division of the Motor and Equipment Manufacturers Association, announced they were working with global event management and trade show firm Messe Frankfurt Inc. to develop a new, biennial North American-based truck and transportation event. However, no additional details, including specific dates or location, have been announced since that time. “We will continue to work with the other truck manufacturers and strategic industry partners over the coming weeks to solidify their commitments with the goal of presenting the full event concept to the industry at large by July 1,” said Joe Glionna, vice president of Newcom, in a statement. The new NACV Show targets North American-based commercial fleet owners, heavy-duty vocational applications, commercial and light commercial vehicle dealers, distributors, original equipment manufacturers, service suppliers, and the commercial vehicle trade media. The first three biennial NACV Shows will be held in Atlanta. Atlanta "has done a good job of setting itself up to handle large trade shows," said Glionna.

New Truck Show to Focus on Technology, Fleet Buyers Heavy Duty Trucking / May 23, 2016 The goal of the new North American Commercial Vehicle Show is not to compete with established regional trucking shows that are popular with owner-operators and families, but to provide a more business-focused event showcasing the latest truck technology for fleets. “The main idea here is that what was missing from North American shows was a real focus on the medium to large fleets and the technology of today and tomorrow,” explained Joe Glionna, vice president of Newcom Media USA, one of the partners putting on the new event, in an interview with HDT. The new show will be held Sept. 18-22, 2017, at the Georgia World Congress Center in downtown Atlanta. Daimler Trucks North America is the first truck OEM to announce a commitment to the new show, but other announcements will be forthcoming. The NACV Show is organized and managed jointly by Newcom Media USA and Hannover Fairs USA. Newcom, a major Canadian B2B publisher, puts on the Truck World and ExpoCam trade shows. Hannover Fairs USA develops and manages marketing programs at Deutsche Messe events in Hannover, Germany, and the United States, as well as in emerging markets. The genesis for a new show was the pullout of major truck and engine OEMs from the Mid-America Trucking Show last year. DTNA and others expressed a desire for a show that would run on opposite years to the big IAA commercial vehicle show in Hannover, Germany, and that would have some of the same attributes of the European event, where fleets actually come to place equipment orders. In fact, Glionna said he doesn’t view the NACV show as directly competing against any shows that are currently in the North American market. “We believe there’s a place in this industry for events for truck enthusiasts, for owner-operators, for the family aspect of trucking, and we hope they continue to succeed in various regional markets,” Glionna said. “But what was missing … was an event that brings the buyers together and the latest technologies and the biggest fleets.” He noted there also will be a “robust European technology section of the show.” While owner-operators are certainly welcome, Glionna said, the NACV show will not have some of the types of features that would typically be a draw for this audience, such as a truck beauty competition, driver recruiting booths, concerts, educational programs, and vendors showing off products and services that are not directly related to the business of running a fleet. Quality, not quantity, is the goal when it comes to attendees and exhibitors. “Our expectations are quite low compared to the announced numbers” from some other shows, Glionna said. “We have no interest in having 50,000 people at this show. If we had 10,000 to 15,000 qualified buyers the first year, that would be a big success in our minds. It's not about big numbers, it’s about the right equipment, the right place to do business, and the right people to do business with.” NACV will be a five-day show. While schedules are far from finalized, as plans stand now, only two days are likely to be open to the general public, Glionna said. A third day will be limited to invited guests – customers and prospects of the exhibitors. A fourth day will be for the press, a fifth day for suppliers to meet with OEs. Eventually, Glionna said, NACV can become more of a truck-buying event like IAA. “In the North American market, trade shows are far less about acquisition than European shows, and it’s a mentality that’s not going to change in year one. I think we’re going to see a real attempt to start to create sales cycles where the show becomes a major date in that sales cycle.”

Fleet Owner / May 23, 2016 In an earlier post, I talked some of the issues the trucking industry as a whole should be worrying about at the moment – with slumping freight volumes only the tip of the bad-news iceberg. But what do fleet managers themselves believe are the major issues facing trucking right now? What’s the “view from the trenches” so to speak? I talked to Sandeep Kar, global vice president-mobility research for the transportation practice within global consulting firm Frost & Sullivan, about this subject just last week as his team conducts an annual in-depth survey with 100-plus fleet managers at for-hire and private fleets across North America to unearth those concerns. And here are their top seven concerns based on Frost & Sullivan’s poll: The driver and technician shortage/retention issue Regulatory compliance Total cost of ownership (TCO) Declining equipment utilization Fuel price volatility Freight rate fluctuations The economic outlook and profit margin concerns “There’s much nervousness among fleet managers because margins are eroding; there’s also a lot of ‘interconnectedness’ among those issues as well,” Kar explained to me. “And when you look at declining equipment utilization, that is bad news for [truck] OEMs because that means fleets will probably delay more purchases of Class 8 trucks.” He noted that while fleets have benefitted from the low price of diesel over the past year, there is rising uncertainty regarding the “longevity” of this low price environment. Kar added that most of fleet managers in his firm’s poll believe diesel prices may increase unexpectedly causing severe operating cost increase in the short-to-medium term; a trend that’s started gaining strength in recent weeks. He also pointed out that based on the durations of past business cycles it would be “unusual if we did not enter a recession sometime in the next few years.” Not exactly something to cheer about. So how are all of those “worries” shaping – or perhaps “re-shaping” – the truck specification strategies of among fleet managers? More broadly, do they believe certain truck specs and technology selections can help mitigate the negative aspects of the above-mentioned concerns? Here’s what Kar’s research team discerned: While 55% of surveyed fleet managers reported engine displacement as an important “engine purchase decision influencer,” 34% said their preference now is for trucks in same weight class but with smaller sized engines; that spec will drive their purchases over next five years. Semi-automatic and fully automatic transmissions are the fastest growing advanced powertrain technologies. Nearly 50% of fleet managers reported preference for “OEM nameplate engines” while the remainder reported either a preference for third-party independent engine suppliers or using a mixed-sourcing approach. Interestingly, “convenience of servicing” emerged as the top reason for choosing OEM nameplate engines, Frost & Sullivan found. Roughly 57% of the fleet managers polled said they are interested in hybrid powertrain systems if the upfront price premium can be recovered within three years or less from date of purchase. There’s also a “noticeable increase” in the percentage of fleet managers likely to consider OEM nameplate transmissions as well, though 42% of them consider place OEM nameplate and third-party independent transmission suppliers on equal footing. Nearly three in four surveyed fleet managers said natural gas as a truck fuel is “attractive” if – and this is a big “if” – the price difference between a gallon of diesel and a diesel-equivalent gallon (DGE) of natural gas is maintained at $1 or more and it “adequate” natural gas fueling infrastructure is established. On top of that, an 11.6-liter displacement seems to be the most preferred natural gas engine of choice by the fleet managers in Frost & Sullivan’s poll. On another front, the firm dug up some interesting safety insights – particularly in terms of how much fleet managers are willing to pay for technologies such as forward-collision warning and the like: The increased ability to take preventive measures, tangible return on investment (ROI), reducing likelihood of accidents, and improved driver monitoring are the biggest reasons driving purchases of specific safety technology packages. A separate Frost & Sullivan poll found that roughly 60% of fleets have experienced a rollaway/runaway crash over the past 24 months, with 18% of these incidents resulting in fatalities. That data in particular is driving Bendix to develop a new product called “E-Park” that it hopes to make commercially available in 2018. [Read more about that here.] A price tag of $2,750 was found to be the “optimal” dollar amount for automatic collision mitigation systems, implying that if these systems are priced at this level, adoption rates could increase rapidly. In particular, Kar told me that there are too many “disparate” safety systems available today and that fleet managers would prefer one system offering multiple capabilities – driver monitoring, video, automatic emergency braking, etc. – down the road to help them reduce their spend on such technologies. Then we come to telematics in trucking; subject matter Kar is well-versed in but also one that fleet managers seem to view as a way to help solve their many myriad problems; from increasing asset utilization to reducing maintenance costs. Here’s a sampling of Frost & Sullivan’s findings: Separate research by Frost & Sullivan indicates trucks are traveling empty 30% of the time. About 55% of fleets with more than 500 vehicles use a telematics-based transportation management system (TMS) of some sort, the firm noted, which drops to 32% or fleets operating between 50 and 500 trucks and declines to just 4% for fleets running 50 or fewer vehicles. Some 48% of the fleet managers polled by the firm showed interest in smartphone based freight brokering, also colloquially known as “Uber for trucks.” While most fleet managers continue showing preference for in-vehicle installed telematics hardware device, share of portable /handheld devices is growing. Third party telematics providers continue to lead in-vehicle telematics hardware device enabled telematics services market; however, the share of truck OEM-provided systems is now at 41% among surveyed fleets. Monitoring of drivers and vehicle (both mobile resources) now rank as most important and influential factors for fleets when purchasing telematics services and associated hardware. Critical event alert/safety system intervention alert is the most preferred telematics service among surveyed fleet managers, with $5 to $10 per month being incremental service fee range for this feature. Optimal price for this technology was found to be $5.50 per month per truck, based on the firm’s “price sensitivity” measurement analysis. Some 65% of surveyed fleet managers showed interest in a remote calibration and maintenance system – a trend that is more pronounced among medium sized fleets - while 48% them would prefer to pay for such services upfront at time of vehicle purchase rather than as an ongoing monthly fee. Of all the telematics services offer, prognostics is estimated to grow fastest among the fleet managers polled by Frost & Sullivan as rising equipment complexity, the growing technician shortage, and need for downtime reduction are behind the rising interest in prognostics. Some 92% of safety managers and 78% of maintenance managers showed interest in remote diagnostics/prognostics data integration to their organization’s maintenance management systems. Yet what are fleets willing to pay for such telematics-driven services? According to the firm’s poll, $26 per month per truck is the highest monthly subscription fee fleets are willing to pay to adopt telematics “en masse.” For prognostics, the highest fee that fleet managers were willing to pay was $12 per truck per month. However, Frost & Sullivan found that $4 per month per truck is the “optimal price point” for prognostics. Those are definitely a wide range of interesting trends for fleets to ponder as we ride out the (hopefully) short term speed bumps now occurring in the freight world.

Transport Topics / May 23, 2016 Company Also Says It Will NOT Return to MATS in 2017 on ‘Collective Corporate Basis’ Daimler Trucks North America on May 23 announced its intention to exhibit at the first-ever North American Commercial Vehicle Show in Atlanta in September 2017. The company also told Transport Topics it will not return next year on a “collective corporate basis” to the Mid-America Trucking Show in Louisville, Kentucky. “Daimler Trucks North America has diligently reviewed numerous concepts and proposals for the next evolution in shows and exhibitions in the North American commercial vehicle market, and we have chosen the North American Commercial Vehicle Show as the one commercial vehicle event that can meet our business goals and needs,” DTNA President Martin Daum said in a statement distributed May 23 by NACV Show organizers Newcom Media USA and Hannover Fairs USA. Daum said NACV would be “the perfect platform” for his company to connect with “our suppliers and fleet customers, launch new products and meet with industry press." “Our choice to sign a letter of intent for the NACV has no connection to other annual regional shows. Attendance at regional shows such as MATS . . . by local dealers or individual brands will be at their discretion. We will not be attending these shows on a collective corporate basis,” DTNA spokesman David Giroux said. “The NACV will be a showcase for technologies and innovations across all Daimler Truck brands operating in North America. We look forward to the inaugural show in September 2017,” Giroux added. As an example, DTNA might have a limited presence at shows other than NACV if a dealership or the Western Star Trucks or Detroit Diesel Corp. subsidiaries choose to make an appearance. MATS has a strong following among owner-operators and that might make the show appealing to Western Star, for instance. The May 23 announcement is part of an ongoing struggle on how to market heavy-duty trucks in North America involving MATS — an annual event in Louisville — and another proposed show to be sponsored by American Trucking Associations and the Heavy Duty Manufacturers Association. All four North American truck-making corporations and independent engine maker Cummins Inc. backed out of the 2016 version of MATS, saying that an every-other-year format makes more sense. They want to display in Europe at the IAA Commercial Vehicles Show in Hanover, Germany, in even-number years, and a major North American show in odd-number years. Exhibit Management Associates, the owner and organizer of MATS, has been clear on its intention to keep Mid-America a spring event at the Kentucky Exposition Center, as stated by EMA President Toby Young. Prior to the May 23 announcement from DTNA, OEMs have been hedging their bets on 2017 plans. As recently as May 11, Volvo Trucks North America executives were asked about their plans at a press event and said they would display at a North American truck show in 2017 but would not specify which one. “HFUSA and Newcom formed this strategic collaboration to offer industry participants a first look at new products and solutions as well as a premier destination to network and form business partnerships,” HFUSA President Larry Turner said in the announcement. Hannover Fairs is a North American subsidiary of Deutsche Messe, which operates IAA. “We will continue to work with the other truck manufacturers and strategic industry partners over the coming weeks to solidify their commitments, with the goal of presenting the full event concept to the industry at large by July 1,” added Joe Glionna, vice president of Newcom. Related reading - http://www.bigmacktrucks.com/topic/44835-finally-%E2%80%93-professional-int%E2%80%99l-level-truck-show-coming-to-america/#comment-330425

Not really off topic Paul. Your correlation is dead on. Anyway, you are always a fountain of knowledge and interesting thoughts. I look forward to all your posts. Thank you BTW, JAC's light truck range is virtually as good as the Japanese units, and available with the Cummins 3.8-litre ISF (http://jacen.jac.com.cn/showroom/n-series.html).

Trade Trucks.com.au / May 23, 2016 With an Atkinson on the back, Mark and Elaine Abbott’s Mack made a splash at the Harden Truck and Tractor Show It’s just over an hour’s drive from Cowra to Harden, which proved no problem for Mark and Elaine Abbott’s 1969 Mack Flintstone for its third Harden Truck and Tractor Show. With a trailer on the back, it also hauled a mate’s Atkinson to the event. Mark says he bought the Mack three years ago as a "play toy". "It’s got Hendrickson suspension, it’s powered by a VT 903, and I’ve just put a 15-speed Roadranger in it," he explains. "It’s very unique". Mark explains that the Flintstone has had 10 owners, and he’s tracked down most of them. "But we don’t know who put the 903 in it." What he does know is that it started off as a 711 with a duplex box in Newcastle, later sold at auction in 1975. At one time it ran Sydney to Melbourne for Border Express. The Flintstone had been sitting idle in a paddock for six years when Mark bought it: "I fell in love with it, of course." Getting the Mack mobile proved no issue. "We just washed it," Elaine smiles, although Mark had to make some minor adjustments to get it on the road. "We pressurised the start tank, put a battery on it, turned the key, hit the button and it started, and we drove it home," he explains. "I put a different rear end in it to get better road speed, because it was sitting on 2500 revs doing 97km/h." The Flintstone is not the only Mack in the Abbott’s collection. There’s a recently retired CH model which Mark bought nearly 10 years ago, and a new Super-Liner. "We’ve got a ’79 model Dodge," Mark says. "It’s a work in progress, but the Flintstone takes priority." Mark has, for the most part, been a Mack man since he started working for Aztec — now Boral — 25 years ago. "I started in a 285 Mack, an S-Line after that, then I got a Valueliner. I was in love when I got that," he says. "Then I ended up with a 650, then I bought an Eagle — I didn’t have that for very long — then I bought the CH and hardly spent a cent on it. "It’s done 1.5 million kilometres and still has the original injectors and the original compressor."

May 11, 2016 / 360 Truck Navistar’s “Global Operations” partner JAC recently displayed an all-new high-cab heavy truck concept. The flagship tractor concept, codenamed “Crossing", will feature high-power engines including the 11.8-liter Cummins ISG and 11.6-liter Weichai WP12, available with a ZF AS Tronic automated manual transmission (AMT). The cab is fully air suspended, as are the rear drive axles. Other details remain sparse. --------------------------------------------------------------------- The $3 million question......did Navistar provide JAC with design assistance on this project, as they have with existing Class 8 models? If so, that would indicate Navistar’s current engineering staff has what it takes to design a modern, competitive global market COE in year 2016. .

Commercial Motor TV - sponsored by DAF Trucks / May 20, 2016

Ford Motor Company / May 20, 2016

Class 8 outlook: Market factors could again drive business Fleet Owner / May 20, 2016 If you're looking for economic barometers for trucking, Kenworth is seeing a lot of positive signs lately — but like others, predicts 2016 will be good, but not great, for Class 8 sales in the U.S. and Canada. One indication of the Class 8 market is how many trucks are being churned out at assembly plants like Kenworth's in Chillicothe, OH. On an editors' tour on Wednesday, Plant Manager Judy McTigue noted the facility produces 80 trucks during the day shift and another 48 at night for a total of 128 per day; the lesser amount on shift two was "feathered down" a bit from last year in step with market demand, she said. Kenworth Director of Marketing Kurt Swihart pointed out there are a number of indicators that could bode well for the heavy truck market. He noted that the company's product sales have shifted dramatically to its latest T680 on-highway and T880 vocational trucks, which were launched in 2012 and 2013, respectively. Walking through the Chillicothe plant today, "it's very difficult to find one of our legacy models," Swihart contended. "I would guess that 90% of our current production here in Chillicothe is our T680 and T880 model lineup." With the T680 accounting for more than half of sales, the T880s are a big chunk of the rest. For one thing, "housing and construction are doing well, and that's a big part of our business," Swihart said. "Whether it's road-building, whether it's commercial construction, whether it's housing, there's very good, robust construction activity [in the North American market] and particularly in the United States," he added. Meanwhile, oil prices have been inching closer to the $50 mark per barrel of crude. "As oil prices dropped, it's kind of a double-edged sword for us," Swihart said. "It's good for fleets because they enjoy lower operating costs, but many of our customers are in the oilfield business, and much of that slowed down. "Oil was priced below a sustainable level of profitable operations in many of those industries, and as oil is increasing, it's opening up some of those industries again," he continued. "That could turn from being a slight headwind for the industry back into a tailwind that will help drive business." Overall, Kenworth is projecting Class 8 sales for the U.S. and Canada will be about 10-20% lower in 2016 than last year. "Our forecast for 2016 is Class 8 will be a market of 220,000 to 250,000 units, and we expect it'll be the third-highest year in the last 10 years. It is slightly down from nearly 280,000 Class 8 units in 2015, but it's still a very healthy market," Swihart said, referencing total retail sales. In other good signs, Swihart pointed to truck tonnage increasing just in the last two or three months, as reported by the American Trucking Assns. Additionally, manufacturing saw a slight contraction closing out 2015 and in the first months of 2016 but is again on an upswing, he noted, citing the ISM Manufacturing Index. "In recent months, manufacturing is expanding, and that's also good for our business," Swihart said.

Fleet Owner / May 20, 2016 Despite objections from the White House and the Truck Safety Coalition, the Senate on Thursday easily approved an annual budget bill that contains a provision to address a problem with the hours of service restart language in last year’s bill. The legislation also includes an amendment that puts a six-month deadline on the proposed truck speed limiter mandate. The $56.5 billion FY2017 Transportation, Housing and Urban Development, and Related Agencies (THUD) Appropriations Act, part of a package that also funds veterans’ benefits and a response to the Zika virus, passed with a bipartisan vote, 89 to 8. Included with the DOT budget is the provision to correct a potential problem with the 34-hour restart. The Senate Appropriations committee’s solution calls for a weekly cap of 73 hours, in addition to clarifying which restart rules would be used if a study shows the 2013 changes are not effective. Earlier this week a House subcommittee advanced its version of the THUD bill that also addresses the restart matter. The House Appropriations committee is scheduled to markup the bill May 24, with key committee Democrats expected to resist several trucking provisions. The American Trucking Assns. Thursday asked Congress to quickly advance legislation that would maintain the current restart rule, “which gives professional truck drivers the flexibility and opportunity to take extended off-duty periods without restrictions.” “We have said since the broad framework of the current hours-of-service rules went into effect in 2004—complying with these rules improves safety,” said ATA President and CEO Bill Graves. “The flexibility to take additional rest that the restart provided for a decade, and is providing now, allows drivers to get additional off-duty time and rest, and we shouldn’t be putting restrictions on that—certainly not ones that have been shown to push truck traffic into riskier daytime hours.” The speed limiter amendment calls for DOT to issue “a final rule” not later than 6 months after the bill becomes law. And that will take some doing, given the pace so far. The rulemaking, which originated nearly 10 years ago with petitions from RoadSafe America and ATA, was officially initiated in May 2013 and was originally scheduled to be published in March 2014. But the Notice of Proposed Rulemaking was sent to the Office of Management and Budget for review in May 2015, and that means it has been stalled at the White House for a full year. In presenting the administration’s budget for the DOT in March, Transportation Secretary Anthony Foxx assured the Senate Appropriations transportation subcommittee the NPRM would meet a projected April 22 publication date. “As a top priority, we’ve been working with OMB to get that rule pushed out,” he said at the time. The latest monthly Report on DOT Significant Rulemakings, just posted for May, has projected a publication date of “Spring 2016.”

Daimler Sees NAFTA Class 6-8 Market Dropping 15% Heavy Duty Trucking / May 20, 2016 Citing “sustained contraction” of global truck markets— including North America-- Germany’s Daimler Trucks has adjusted its 2016 outlook. The OEM now expects its operating earnings will “significantly lower” this year vs. “the very good levels of last year.” On the other hand, the company added that its profitability this year will “remain very high.” While stressing that it is “defending its clear market leadership” in the NAFTA market, Daimler Trucks pointed out that “at the same time, there has been no revival of orders received, especially in the heavy-duty segment (Class 8).” In a May 19 press release, the parent company of Freightliner and Western Star said it now forecasts that the overall North American market for Class 6 to 8 trucks will “contract by approximately 15% in 2016.” The Germany-based OEM said the drop-off across the Atlantic can be offset only partially by a rising European truck market. “Although demand in Europe is significantly higher than last year, the competitive situation has become much more intense and is influencing market players’ pricing,” the company stated. “Another factor is that the persistently low price of oil is having a sustained negative impact on [truck] demand in the Middle East.” Daimler also said the outlook for developing markets in Brazil, Indonesia and Turkey has been “worsening since the beginning of the year and continues to worsen.” It expects the Brazilian market will contract by about 20%, thanks to the “political and thus also [the] economic situation” again deteriorating there. As for Indonesia, Daimler expects to see a decrease of about 15%. The OEM also sees “substantially lower” demand in Turkey, due both to purchases being brought forward to 2015 and the “very negative geopolitical conditions” in place. “The situation of global truck markets has been challenging for several months and has recently got worse,” stated Wolfgang Bernhard, Member of the Board of Management of Daimler AG and Head of the Daimler Trucks and Daimler Buses divisions. “Especially in the NAFTA region, but also in the Middle East, demand is weaker than previously expected,” he continued. “We have therefore adjusted our outlook for the rest of this year. Although the forecast is for lower numbers than in 2015, we continue to anticipate a high level of earnings in the full year.”

Transport Topics / May 19, 2016 Daimler Trucks said it lowered its outlook for overall North American truck sales for Classes 6-8 in 2016 as orders for Class 8 trucks especially have not revived. It now forecasts sales will be off about 15% compared with 2015, down from its previous forecast of a 10% decline. North American Class 8 orders have declined year-over-year for 14 consecutive months. “The situation of global truck markets has been challenging for several months and has recently got worse. Especially in the Nafta region, but also in the Middle East, demand is weaker than previously expected,” Wolfgang Bernhard, head of Daimler’s global truck and bus division, said in a statement. Daimler’s statement did not provide estimated sales numbers for this year. Daimler Trucks is a unit of Daimler AG and the parent company of Daimler Trucks North America (DTNA), which is the market leader in Classes 6-8 sales. DTNA spokesman David Giroux told Transport Topics the company “could not comment at this time regarding further workforce reductions at its plants.” In January, DTNA announced plans to lay off an estimated 936 employees, or 30% of the 3,100 workers at its Cleveland Truck Manufacturing Plant in North Carolina, which makes heavy-duty Freightliner and Western Star trucks. U.S. Class 8 retail sales for DTNA, which also includes the niche nameplate Western Star, in 2015 were 100,214, good for a 40.3% market share. “Although the forecast is for lower numbers than in 2015, we continue to anticipate a high level of earnings in the full year. 2016 will be one of Daimler Trucks’ most profitable years, due not least to the successful continuation of our efficiency actions,” Bernhard said. “While the news [from Daimler] is certainly negative," Michael Baudendistel, an analyst with Stifel, Nicolaus & Co., wrote in a note to investors, "this reduced outlook does not come as a surprise given the weak year-to-date order data in Class 8 trucks, though Classes 5-7 orders have been somewhat stronger than anticipated, and due to the fact that we believe Daimler's prior guidance was somewhat optimistic. Following Daimler's reduction, their outlook is now roughly in line with our prior outlook.” Baudendistel’s note last week forecast 2016 Class 8 production would be 230,000 units in North America, down nearly 30% from 2015 production of about 323,000 units. “Our estimate is below other analyst's current forecast of 236,522 units.” Against this backdrop, Daimler Trucks said it will intensify the efficiency actions that are already being taken. In Brazil, further workforce adjustments will have to be made, for which Daimler Trucks has made a voluntary severance offer, it said. In this context, Daimler Trucks anticipates expenses totaling up to about $112 million as a special reporting item in 2016. However, nothing has changed with regard to the medium- and long-term growth drivers and success factors for the key markets of Daimler Trucks, the company said. “ Along with managing volatile truck markets, we continue to pursue our strategy systematically. With our technologically leading position, global presence and intelligent platform concepts, we will take further determined measures also in the future,” Bernhard said.