Kenworth sees 2017 U.S. truck market continuing at 2016 levels

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Fleet Owner  /  August 12, 2016

Characterizing the 2016 economic climate as “a good year overall though off slightly from last year,” Kenworth Truck general manager Mike Dozier nevertheless sees U.S. retail Class 8 sales falling off from an initial forecast set a range of 260,000 to 280,00. Given softer than expected sales in the first half, that forecast is now down in the range of 235,000 to 240,000, he said during a press conference at company headquarters.

Coming off 2015’s exceptionally strong sales, the average age of the U.S. heavy truck fleet is at it’s lowest in years, so combined with sluggish economic growth and softer freight demand, the downturn in truck sales wasn’t a surprise.  “We’ve been making adjustments in manufacturing capacity since the end of 2015,” Dozier said.

As for 2017 heavy-duty truck sales, “we think the market will hold at 2016 levels,” he said.

Turning to Kenworth performance, Dozier said the (DAF) MX-13 and newly introduced (DAF) MX-11 engines are now powering about 45% of Kenworth’s new trucks and that it’s T680 and T880 models now account for 80% of that build.

Separately Kenworth announced that it will sunset the older T660 at the end of the year with a final production run of 500 units.  The T660 was introduced in 2007 as a replacement for the original aerodynamic heavy-duty tractor, the KW T600.  Over 60,000 have been produced in the last nine years, according to Jason Skoog, assistant GM for sales and marketing.

“This final [production run] will give customers one final chance to own a T660,” Skoog said.

The T660 is available as a day cab or in 38-inch, 62-inch, 72-inch and 86-in. sleeper configurations. Standard power is the MX-13 rated at 455-hp and 1,650 lb-ft of torque.

Other product news announced at the press event includes expansion of the T370 vocational model to include a “Baby 8” version with 46K-lb. rear axles and 385/65R22.5 steer tires. Applications for the heavier capacity T370 include dump, fuel tanker, utility crane and mixer.

The T680 lineup has also been expanded with an aerodynamic package for the day cab model. Combined with powertrain refinements, the Advantage package can improve fuel economy by up to 6% over non-Advantage day cabs, according to Kevin Baney, KW chief engineer. Aerodynamic features, adopted from Advantage sleeper configurations, include a front air dam, new roof cap seals and lower fairing extensions.

The optimized powertrain includes either the MX-13 or MX-11 engine, Eaton Fuller Advantage 10-speed automated transmission and Meritor MT40-14X drive axles.

The T680 day cab is also serving as the platform for a near-zero-emissions drayage truck being developed by Kenworth.  With three grants totaling $6.8 million from Federal and California clean air programs, the company will deliver a total of six hybrid diesel-electric versions of the T680.  At least one will use a CNG engine to produce electric power and another a hydrogen fuel cell, both with an all-electric range of 30-mi. and both assigned to port drayage duties at Long Beach.  Technical specs for the other four hybrid electrics aren’t finalized, but they will run in a Southern California customer field test, according to Kenworth.

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Kenworth upgrades T370 medium-duty vocational truck

Heavy Duty Trucking  /  August 12, 2016

In other news, Kenworth announced that it is enhancing its T370 medium-duty truck with additional new options that further expand its capabilities for vocational customers.

These upgrades include a new, durable straight steel channel bumper, larger size 385/65R22.5 steer tires, and rugged, molded thermoplastic fender extensions. The heavy front axles can be paired with 46,000-lb. rear axles to create specifications ideally suited for vocational applications, such as dump, fuel delivery, utility, crane, service trucks, or mixers.

Additionally, Kenworth CEO Mike Dozier noted that after a successful 10-year run, the company will "sunset" production of its T660 Class 8 tractor. The final production run of 500 units is underway now. Dozier noted that more than 60,000 T660s have been sold over the past decade.

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Low- and Zero-Emission T680 Day Cabs to be Tested in California Ports

Heavy Duty Trucking  /  August 12, 2016

Kenworth has received $8.6 million in federal grants for low-emission T680 Day Cab drayage truck projects in California. The three government grants will support low-emissions projects involving Kenworth T680 Day Cabs targeted for use as drayage tractors in Southern California ports.

The first two projects are funded at $1.9 million each by the U.S. Department of Energy Office of Energy Efficiency and Renewable Energy, with Southern California’s South Coast Air Quality Management District as the prime applicant. Kenworth will build two proof-of-concept T680 Day Cab drayage tractors to transport freight from the Ports of Los Angeles and Long Beach to warehouses and railyards along the I-710 corridor in the Los Angeles basin.

The first will be a hybrid electric drayage truck producing near-zero emissions using a currently available compressed natural gas engine to generate electrical power. The second will feature a hydrogen fuel cell offering true zero-emissions operation. These trucks are expected to be identical, except for their power generation systems. Both trucks will have an all-electric range of 30 miles, as well as on-board CNG and hydrogen capacity, respectively, of 100 diesel gallons equivalent.

The third project is funded at $4.8 million by the California Air Resources Board, again with the SCAQMD as the prime applicant. Kenworth will build four hybrid-electric T680 Day Cabs and support the customer field test of the units in Southern California drayage operations.

“Hybrid-electric powertrains are expected to be required within seven to 10 years to meet emissions requirements in several major metropolitan areas of the United States," said Mike Dozier, Kenworth general manager and Paccar vice president. "Already California is considering regulations requiring port drayage trucks to run at zero-emission levels when operating in economically disadvantaged communities. These T680 Day Cab projects are a great opportunity for Kenworth to advance the development of key technologies that may play a critical role in the trucks of the future.”

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Kenworth enhancing day cabs, ending T660

Today’s Trucking  /  August 13, 2016

Kenworth has unveiled several new and coming product enhancements, particularly to its lineup of day cabs, but has also announced that it will officially end production of the venerable T660.

The company has sold 60,000 of that aerodynamic tractor since it was first introduced in 2007, essentially replacing the T600. A final 500 of the T660 cabs will be built this year until the last model rolls off the assembly line.

About 80% of the trucks that the company builds today are the T680 or its vocational sibling, the T880. The T680 itself accounts for about 60% of sales, with the T880 at just under 30%.

The changes come as Kenworth, like every other truck manufacturer, faces slumping Class 8 truck sales across North America. It is now projecting a retail market of 220,000 to 240,000 Class 8 sales this year, down from earlier projections set between 260,000 to 280,000 units. Still, the company did adjust its production rates last year to account for a smaller market.

“Certainly things have come off slightly since last year,” said Mike Dozier, Kenworth general manager and PACCAR vice president since April. And it has been a slow summer, but summers are historically slow. Putting the sales into context, 2016 will still be a good year for truck makers.

“A strong market would put it in the Top 5 markets that we’ve seen,” he said. “The fleet is as new as it’s been in a long, long time … We see 2017 as a continuation of 2016, as we get a normalization.”

Several factors are feeding the projections. The U.S. Gross Domestic Product is up 2% in the second quarter of the year, and a strong construction sector is supporting segments served by dump trucks and mixers, he noted in a media briefing. Even auto sales, which have slowed, are still up 0.4% year over year. Looking specifically at trucking, freight tonnage is up 2% year over year, while fleet utilization has bumped up 1% to 87%. The challenge for fleets is freight rates, which have dropped 0.06%, he said.

For Kenworth stockholders, Dozier presented other positive news. The company has now enjoyed 77 consecutive years of net profit, and paid dividends every year since 1941. An A+/A1 credit rating also helps to ensure cash is on hand for further investments in the company and its products, Dozier said. The latest addition to the PACCAR tech center is a climatic-controlled wind tunnel, which can simulate everything from summer desert conditions to frigid winter temperatures at altitude. It’s one of only two such systems in North America.

In the midst of it all, Kenworth expects its market share to edge up to 15%, and account for 9% of medium-duty trucks.

Roughly 45% of the new trucks also come with proprietary engines, including the MX-11 that was introduced at the beginning of the year. By the end of the year, the company expects there will be 130,000 PACCAR engines on the road.

“The future continues to be very, very bright,” Dozier said.

More to come

“We’re very proud of what we’ve accomplished, but we’re not done,” said chief engineer Kevin Baney.

Kenworth had projected that it would boost fuel economy about 3-5% per year, and delivered a 15% increase in 2013, Baney said, adding that further enhancements are planned for next year.

The T680 Advantage day cab is one of the latest trucks to receive aerodynamic and powertrain upgrades. Launched this month, it includes a front air dam, roof cap “bulb” seal, lower fairing extensions and lower fairing closeouts. The aerodynamic improvements boost fuel economy 1% over a model without the Advantage package, while powertrain upgrades – including an MX-11 or MX-13 engine, 10-speed Eaton Fuller Advantage Automated Manual Transmission, and Meritor MT40-14X drive axles rated at 40,000 pounds -- increase fuel economy 5% on their own.

Kenworth is also leveraging three grants valued at a collective US $8.6 million to develop a low-emission T680 day cab for drayage operations, complete with systems that use Compressed Natural Gas to general electrical power. The first day cab included in the investments will be a T680 hybrid electric drayage truck. A second will feature a hydrogen fuel cell. And both will have a 30-mile range under electrical power. Another four hybrid-electric day cabs will be created under the $4.8 million in funding that comes from the California Air Resources Board (CARB).

Day cabs are not the only trucks to be enhanced. The T370 vocations with a 46,000-pound rear axle and suspension will now include a straight channel steel bumper, larger 385/65R22.5 steer tires, and molded fender extensions to improve air flow around those wheels.

About 30% of all T680s also come with the Bendix Wingman Advanced system. The option combines cameras and radar to better identify objects for adaptive cruise control and emergency braking. Assistance to keep in lanes is also being developed, Baney says.

It all feeds into the evolution of semi-autonomous trucks. Any barriers to those have more to do with public acceptance than technology, he said. “The technology is there. It’s more about how do you carry out platooning when you get it out into the infrastructure.”

The regulatory environment presents other challenges, Dozier added. “There’s a significant difference between a passenger vehicle that has autonomous capability and a commercial vehicle that has autonomous capability.” Kenworth engineers are even testing that with a recently acquired driver-assisting Tesla.

Support

Kenworth now has 370 dealer locations across North America, including a growing number that have qualified for the Premier Care Gold designation that identifies sites that offer two-hour triage service, extended hours, certified PACCAR engine technicians, and personnel dedicated to TruckTech+.

More than 18,000 trucks are now equipped with the latter remote diagnostics platform, said Jason Skoog, assistant general manager – sales and marketing. Collectively, they’ve now logged about 600 million miles under the system’s watchful eye. “The beauty of the system is in its simplicity,” he said. Messages for fleets and drivers are as simple as stop now, service now, service soon, or keep driving.

Demonstrating the system, engineer Micah Einterz showed how a truck demonstrating a coolant fault code showed up as a red dot on a map of fleet assets. Drilling down into the report, it not only showed that coolant levels were too low, but how rapidly those levels were lost. Information is provided on the three closest dealers and feedback from sensors collected 60 seconds before and 10 seconds after the fault code was triggered. Likely maintenance needs were identified on top of that.

“Today it’s diagnostics. Very shortly it will be prognostics,” Dozier said, referring the possibilities of Big Data.

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Despite adjustments, Kenworth remains optimistic for 2016 and beyond

Truck News  /  August 12, 2016

Kenworth Truck Company and Paccar held an editor’s event at its office in Kirkland, Wash. Aug. 12, where it highlighted several company initiatives, including the launch of the more fuel efficient T680 Advantage Day Cab, bidding adieu to an old favorite and how the year has been shaping up so far.

Mike Dozier, general manager of Kenworth and vice-president of Paccar, said the first half of the year has been profitable.

“We feel very good about the first half,” Dozier said of Kenworth and Paccar’s 2016 numbers. “We’ve capped off 111 years for Paccar of very superior performance and our 77th year of net profit.”

The company has generated $8.7 billion in revenue during the first half of the year.

Dozier said the company’s year-end sales numbers have been adjusted to better reflect the current market, with estimates going into 2016 between 260,000 to 280,000 units sold being downgraded to between 220,000 to 240,000.

Kenworth also made a number of adjustments on the manufacturing side to be ‘well positioned’ to fit production with where the market sits.

Dozier said fleet profitability has continued to be positive, despite not being on the same level as 2015.

“I think we’re certainly looking at 2016 as a good year,” he said, “but requiring more focus than perhaps last year did. With the year overall, we’re looking at a good year. Certainly things have come off slightly since last year, but from a standpoint when we look at the metrics, fundamentals, GDP growth through the second quarter, we do have growth…we have an economy that continues to grow.”

Part of the growth, Dozier said, is thanks to positive performance in the construction sector.

Freight tonnage also continues to climb, but rates can be a concern for some.

“We noted freight rates in yellow,” Dozier said. “That’s one thing we hear from customers, that the common theme is freight pressures. That highlights that it’s so important to be close to the customer and understand their businesses and how we can help them be more successful, because those rate pressures obviously translate into the overall success of their businesses.”

With the release of the T680 and T880 models a few years back, Dozier, who was chief engineer at the Kirkland location prior to relocating to Australia until his return to the Kirkland location in April, said he was proud to see the project he worked on come to fruition.

“It’s not often in a career in this industry you get to see an entirely new product platform come to life,” Dozier said. “The growth of those products to essentially 80% of what we build today, being those 680 and 880 platforms…it’s something we’ve very proud of.”

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Kenworth To Say Farewell To Venerable T660

Kenworth Truck Company Press Release  /  August 16, 2016

Kenworth announced that it will sunset its successful, fuel-efficient Kenworth T660 by year-end after 10 years of production, and offer customers a “last call” opportunity to order from the final production allotment of 500 T660s.

“The Kenworth T660 has been a fantastic truck for our customers with more than 60,000 T660s sold since its introduction in 2007,” said Jason Skoog, Kenworth assistant general manager for sales and marketing. “Due to its popularity, we continued to offer the T660 after introducing the award-winning T680 four years ago.  Since that time, more and more T660 customers have converted to the T680.  We want to give our excellent customers one last chance to own this industry favorite.”

When it entered the Class 8 market, the T660 became the latest evolution of Kenworth’s legendary aerodynamic product line and reinforced Kenworth’s leadership in both quality and fuel economy performance, taking the reins from the Kenworth T600 – the industry’s first truly aerodynamic truck that debuted in 1985. The Kenworth T660 also featured modern styling, superior forward-lighting technology, advanced technology, and increased driver comfort.

Fleets and truck operators interested in ordering the Kenworth T660 may contact their Kenworth dealer for more information. The T660 is standard with the PACCAR MX-13 engine rated at 455-hp and 1,650 lb-ft of torque. The T660 is available in 38-inch, 62-inch, 72-inch and 86-inch AeroCab® sleeper configurations.

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