Mack predicts Class 8 market will stay strong

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Sean Kilcarr, Fleet Owner  /  May 18, 2017

The OEM’s executives also believe that “underlying demand” is far healthier than 2016, which should lead to a ramp up in production.

CHARLESTON, SOUTH CAROLINA. While Mack Trucks expects total Class 8 production volume will reach 215,000 units for 2017 – mirroring projections by other industry analysts – the OEM also believes that “underlying demand” for heavy trucks is stronger than many think, meaning that the market should exit 2017 stronger than when it entered the year, with manufacturers ramping up to build more equipment as time goes on.

“The market is good,” explained Dennis Slagle, Mack’s president and executive vice president with its parent company, the Volvo Group.

“We’ve come out of a long correction in the long-haul sleeper and daycab segments, while vocational sales continued to do well. That played to Mack’s strengths so we had a good first quarter this year.”

High inventory levels were one reason for that “correction,” he said, with virtually all of it comprised of on-highway Class 8 trucks.

But inventory peaked in October 2015 and has now been reduced to what Slagle called “a healthy level” and that OEMs have now positioned their factories to build to customer demand.

“We’re looking at some sort of ramp [up] to adjust to market conditions,” he emphasized. “Underlying demand is healthier than last year. We also think the business-friendly environment of the Trump administration will help if he gets through the mismanagement of the [federal] bureaucracy and gets back on track to focusing on the economy.”

Jonathan Randall, Mack’s senior vice president of sales, added that Mack grew its market share in every one of its segments last year – on-highway, regional, vocational, etc. – for a total gain of about one percentage point, which, “by all accounts is putting Mack on a roll.”

He noted that the OEM plans to expand on its “growing foothold” in the long-haul market with a product announcement slated for later this year, alongside plans to keep growing its regional business while maintaining its position in the vocational segment.

“We see the same [growth] trends we experienced last year occurring this year,” Randall pointed out.

Part of that growth trend includes faster adoption of [Volvo I-Shift] Mack’s proprietary mDrive automated mechanical transmission (AMT), stressed Roy Horton, Mack’s director of product strategy.

He said the mDrive is being spec’d in 80% of the OEM’s Pinnacle axle back highway models, 60% of its Pinnacle axle forward models, and 20% of its Granite conventional trucks – with Randall noting that the backlog for mDrive gearboxes spec’d in Granite vocational models is now at 30% for 2017.

Overall, Horton said AMTs and fully-automatic transmissions are now being spec’d across 80% or more of all Mack’s models, with only 15% to 20% of orders requesting manual transmissions.

“We sell more Eaton manual transmissions on the highway side of our business, while our proprietary Maxitorque [manual] is the predominate selection on the vocational side,” he added.

Other trends Mack touched on during its Charleston conference included:

• Slagle believes demand for trucks that run on liquid natural gas or LNG “is dying” while demand for compressed natural gas or CNG-powered trucks “is staying pretty steady.”
• While that is promising, he added that diesel remains a “foundational fuel” as it is powerful, clean, and fuels 3.5 million vehicles in the U.S. served by 60,000 filling stations across the country. “Diesel is going to be with us for a while,” he stressed.
• Horton noted that demand for engine displacements greater than 13 liters is declining rapidly across the Class 8 segment. In 2009, he said, 56% of Class 8 trucks had engines with displacements greater than 13 liters; by 2016 that dropped to 40%.
• John Walsh, Mack’s vice president of global marketing and brand management, noted that the difficulty of finding drivers remains an “underlying theme” among the OEMs customers. “The hard part is putting into numbers just how many more trucks the industry would sell if it had enough drivers,” he said.
• Randall noted that OEMs remain supportive of Phase 2 greenhouse gas (GHG) rules and that Mack will not change its GHG-based product plans going forward. “They will help us meet customer demand for more fuel economy,” he explained.
• However, Slagle stressed that it remains “very challenging” to get Class 8 trucks to meet the GHG standards. “Make no mistake, this is costing a lot of money and the end user must embrace that as well,” he pointed out.
• David Pardue, Mack’s vice president for connected vehicles and uptime services, said more than 55,000 Mack trucks are now on the road equipped with the OEM’s GuardDog Connect telematics system. Even legacy models can now be upgraded with a similar telematics function via its new partnership with Geotab.
• Pardue added that 91 dealers now certified as “uptime centers.” At those locations, repair diagnostic times are down an average of 70%, repair times in total are down 21%, shop efficiency is up 24% and “check in” time for repairs is down by over 40 minutes.

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Mack Trucks Sees Its AMTs Increasing Adoption in the Market

Transport Topics  /  May 19, 2017

CHARLESTON, S.C. — As one part of its integrated powertrain strategy, Mack Trucks’ line of automated manual transmissions is seeing increasing adoption in the market, said executives with the heavy-duty truck maker.

When Mack Trucks starting building trucks in 1907, it had “a completely proprietary powertrain and it took about 85 or 90 years for everybody else to catch up,” said Jonathan Randall, senior vice president of sales for Mack Trucks. “Now you see the rest of the industry kind of moving in the same direction with proprietary powertrains and drivetrains.”

Mack Trucks was “really the original disruptors of the commercial industry because we were the first ones to have a fully proprietary drivetrain,” Randall said, but noting that’s a bit tongue-in-cheek.

He spoke with TT during the truck maker’s “Born to Haul” press event May 18 that included a tour of the Port of Charleston. Mack, one of North America’s largest manufacturers of heavy-duty Class 8 trucks, engines and transmissions, is part of the Sweden-based Volvo Group.

Roy Horton, director of product strategy, said that for Mack Trucks, an integrated powertrain is the engine, transmission, driveline and rear axles, as well as the exhaust aftertreatment system. “It’s the configuration of those main components and how we optimize the performance and tailor the trucks for each of our customers’ applications,” Horton said.

As for its automated manual transmissions, Horton said the mDrive and mDrive HD have been a success “out of the gate.” The adoption rate year-over-year has increased in each model it has been offered in, he said, noting Mack Trucks has offered the mDrive in its highway model since 2010, and started offering it in its Granite vocational model in 2015.
The mDrive HD is an upgraded version of Mack’s 12-speed mDrive in its highway model, Horton said. “We upgraded it to make sure it could handle the vocational applications,” Horton said, noting the mDrive HD adds 13 and 14 speeds to offer slow speed “maneuverability” and “startability” that are needed for heavy haul applications.

Horton said there are some “cowboy-type” drivers who want to stick with trucks that have manual transmissions. However, once they drive with an mDrive, they really like them, Horton said, pointing out that mDrive automated manual transmissions help reduce driver fatigue.

At the end of a long week, there’s much less stress for the driver because they’re focused on driving and not shifting — “not having to push a clutch hundreds of times a day,” Randall added.

As for sales trends, Mack Trucks ended 2016 at an 8.9% market share in the United States and Canada, and ended the first quarter with a 10.1% market share, Randall said. The company continues to see the most traction in the construction and vocational markets, he said, noting this includes its dump trucks, cement mixers and water trucks, among others.

“We’re seeing a lot of activity and a lot of opportunity for growth,” Randall said. Another segment in which Mack sees a lot of opportunity is in regional haul and day cab, Randall said. “It’s continuing to be a larger portion, or a larger piece of the overall pie of the entire truck market.”

At the event, Pat Barber, president and CEO of Superior Transportation, a South Carolina-based heavy haul trucking company, and Tracy Gunter Jr. and his son Tracy Gunter III of Tracy’s Logging, a South Carolina-based logging business, were on hand to tout the durability and other benefits of Mack Trucks. Tracy’s Logging has Mack Granite model tractors in its fleet, while Superior has various Mack Pinnacle models.

Randall noted that over the past two years, the Class 8 over-the-road and long-haul truck segments have seen declines industrywide.

In “a normal market,” the on-highway segment accounts for about 50% of the total volume of Class 8 truck purchases, he said. “We participate but not to the ... level we want to, and so we are making product enhancements and product improvements to be seen down the road that make us more of a consideration in that market,” Randall said.

Turning to the regulatory environment, particularly future greenhouse gas regulations, one of the easiest ways to reduce emissions is to reduce fuel consumption, Randall said, noting they’re a “difficult proposition for all OEMs.” For Mack Trucks, the plan is in place and it’s moving forward to make sure it will meet the standards and the economic benefits for its customer base, he said.

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Steady vocational market driving Mack’s growth

James Menzies, Truck News  /  May 19, 2017

Mack’s market share reaches 10-year high as overall Class 8 demand shrinks

In the first quarter of 2017, Mack Trucks reached its strongest share of the Class 8 truck market in more than a decade.

It claimed 10.4% of the US market and 10.1% of the combined Canada/US market, improving on its previous 10-year high reached in the first quarter of 2016. The slowdown in Class 8 order activity over the past year has been most acute in the on-highway sleeper segment, while vocational truck sales have actually increased year-over-year, playing right into Mack’s hands.

“I think, this past cycle has been all about the segments,” said Dennis Slagle, executive vice-president, Volvo Group, and president of Mack Trucks, when addressing trucking journalists at a Mack Trucks Born to Haul press event. “You had this loud correction in the long-haul sleeper segment of the market, day cab was also hit hard but not as hard, and vocational year-over-year has grown. The way we segment it, about 75% of the market is in contraction and the other 25% is quite good, and that kind of mix plays to Mack’s strength. We’ve enjoyed quite a bit of momentum, particularly during the first quarter.”

Last year, the industry-wide challenge was to work through excess inventories.

“Everybody in the industry, including Mack, has been successful in reducing that inventory down to a healthy level,” Slagle said.

The high inventories dealers were saddled with last year meant the drop in Class 8 order activity didn’t reflect the true appetite for new trucks.

“The market was there,” Slagle explained. “It wasn’t that people weren’t buying; it was good enough to get inventories down to safe levels…We’ve gone through that part of the cycle now, inventory industry-wide is at a good level, and we can start looking forward to factories building for the demand rather than factories building less because companies are trying to reduce inventories.”

Last year’s market totaled 243,000 Class 8 trucks in North America, and Mack is projecting 215,000 for this year. But, Slagle added, “the underlying demand feels a bit healthier than it did last year.”

Slagle said a business-friendly administration in Washington should drive stronger demand for new trucks.

Jonathan Randall, senior vice-president, sales, Mack Trucks North America, said Mack’s strongest results in a decade came from maintaining its leadership position in the construction segment and growing its regional haul presence. The company is now looking to strengthen segments such as long-haul, where it’s not as prominent.

It’s also a result of improving the service experience for customers, specifically through GuardDog Connect remote diagnostics, and the rollout of certified uptime centers. Randall said Mack now has 55,000 trucks connected through GuardDog Connect and 91 certified uptime centers, which implement processes to expedite repairs. Even small repairs used to take an average of four days to complete, but certified uptime centers have reduced that “dwell” time to two days.

GuardDog Connect is about shifting from a reactive to proactive repair mindset, explained David Pardue, vice-president, connected vehicles and uptime services with Mack. The MackOneCallCenter analyzes fault codes and advises the operator on the best course of action. When the truck arrives at the dealer, it is pre-diagnosed with a repair plan in place so that it gets back on the road faster. Geofencing is used to track dwell time and Mack intervenes when dealers aren’t meeting expectations. The entire repair process is tracked through the ASIST online portal.

“We’re seeing improvements in dealer efficiency,” Pardue said.

“We can now measure it,” added Slagle. “What you can measure, you can manage.”

Mack’s latest tool with which to improve uptime, is over-the-air engine software and parameter programming. The company is allowing fleets to receive software updates remotely without visiting the dealership, doing in approximately 30 minutes what would traditionally incur two days of downtime. This benefits both fleet managers and drivers, Pardue pointed out.

But Slagle said Mack won’t be eliminating human interaction through the process.

“When we start going full throttle with over-the-air, we will make sure there’s a human on the other end of the line to help if something doesn’t work, so we can talk it through and make sure their experience has been one of, I saved a couple days’ dwell time by being in my truck for 30 minutes,” he said.

In addition to elevated levels of support, Mack also attributed an expanded and increasingly efficient product line to its success. Randall said the mDrive and mDrive HD automated manual transmissions have been hugely successful. Last year, they were spec’d in 20% of Mack Granites (37% this year, to date), 60% of Mack Pinnacle axle forward, and 80% of Mack Pinnacle axle back models.

“The mDrive has been a game changer for us,” added John Walsh, vice-president, global marketing and brand management with Mack Trucks. “It’s great in terms of performance and the fuel efficiency it’s been able to deliver. The other thing is, the broadening of the driver pool. We hear from customers all the time, ‘We’d buy more trucks from you if we had more drivers.’ The mDrive expands that pool. The penetration on the highway side is approaching 90% right now.”

The Mack LR cabover engine refuse truck is also performing well, Randall added, especially in Canada where it owns 75% of that segment.

Tim Wrinkle, construction product manager, said Mack has also been successful convincing construction customers that today’s 13-liter engines can deliver all the torque and horsepower required to do a job that fleets traditionally thought could only be achieved by a 15-liter.

The 13L MP8 [Volvo D13] provides up to 505 hp and 1,860 lb.-ft. of torque, comparing favorably to one 15L on the market that offers up to 505 hp and 1,850 lb.-ft., and rivaling another that comes in at up to 605 hp and 2,050 lb.-ft.

“The 13-liter MP8 is able to deliver big block power and durability,” Wrinkle said.

The durability comes from design attributes that include: a high-strength cast iron block, with bed plate for additional stiffness; 14-bolt flywheel-to-crank mounting (vs 12); more robust connecting rods, with greater bearing surface area compared to competitive 15Ls; and shorter piston travel, which results in less wear and friction on components.

The wide-ranging discussion with Mack executives also touched on hot topics such as autonomous vehicles and alternative fuels. Slagle said Mack is keeping a close eye on the so-called “disrupters,” but doesn’t think autonomous trucks are close to taking over.

“Any manufacturer in this business today has to have their heads up in terms of what is coming in terms of autonomous driving and different drivelines being kicked around and touted by some of the disrupters,” Slagle said. “Autonomous driving, I think it’s pretty clear we’re going to see various ventures into that on the automotive side. On the trucking side, I think the bigger you get, the more complex that will be.”

Slagle said Mack will leverage whatever parent company Volvo Group develops, but added, “It’s something you have to approach very carefully if you have safety as one of your core values. At the right time, with the right partners, and with the right internal innovation, we certainly feel we can be competitive and on top of whatever is going on, maybe even leading it.”

Walsh added autonomous trucks will likely first find a home in isolated environments, such as quarries and other job sites where interactions with other vehicles and humans are limited.

As for all the buzz about electric trucks and other alternative fuels, Slagle said don’t rule out diesel yet.

“The truth is, diesel remains a very formidable fuel,” he said. “It’s powerful. It’s now clean. It has an image problem, but with 3.5 million diesel vehicles out there and 60,000 diesel stations, it’s going to be with us for a while.”

Mack still sees promise in dimethyl ether (DME), which burns clean and eliminates the need for a diesel particulate filter.

“We think, some day, it will have its day,” Slagle said of DME.

 

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Mack Trucks' Slagle is Bullish on Class 8 Truck Market

Heavy Duty Trucking  /  May 18, 2017

CHARLESTON, S.C. The head of Mack Trucks regards the state of the heavy-duty truck market as solid. “Everyone in the industry has succeeded in bringing inventory down to safe levels,” Dennis Slagle, president of Mack Trucks and Volvo Group executive vice president, said at a May 18 media briefing here.

“[Class 8] inventory industry-wide is now at a level that we can look forward to factories building for demand,” he continued. Slagle said the upshot is that this year Mack is forecasting North American truck sales of 215,000 units.

While he allowed that would be down from last year’s total of 243,000, he said it reflects “the industry looking to adjust to true market conditions.” What's more, he said that "the underlying demand is healthier now than what we saw last year, so we see the market leaving 2017 in a stronger way.”

Along with the inventory correction, Slagle said he’s pinning hope on President Trump holding true to his promise to foster policies favored by business interests. “We think, like everyone else, that the business-friendly environment of the Trump Administration— if he will get through the mismanagement he’s done of the bureaucracy— could be helpful [to trucking], such as with infrastructure [spending] and reducing regulations.”

Slagle also hit on the importance of boosting customer uptime for the OEM. “Our greater focus will continue on the service side of the business,” he said, noting that when he entered the truck side of the business, coming from Volvo Construction Equipment,  he was “surprised we were not talking as much about service as other things, such as fuel economy.”

He said Mack has in recent years “taken steps to really help customers manage and increase uptime,” including working “to harvest opportunities not just with the trucks we sell now, but also over the complete lifecycle of trucks, including reman activities and for used trucks through our ownership of Arrow Truck Sales.”

Remarking on the GHG rules promulgated by the EPA as well as those put forth by the European Union, Slagle said it will be “very challenging” to implement the stricter standards globally. “Make no mistake,” he said, “this is costing a lot of money and the end user must embrace it as well.”

Slagle also noted that interest in LNG power is drying up while demand for CNG-fueled trucks remains “pretty steady.” He added that “diesel is going to be with us for a while.”

“Strong tail winds are driving the market and Mack,” said Jonathan Randall, senior vice president of sales. He reported that in 2015, Mack grew share in each of its on-highway and vocational market segments.

Those boosts amounted to a total gain on about one percentage point, which Randall said “by all accounts has Mack on a roll.” And he said the OEM sees “the same trends we experienced last year occurring this year,” which will help drive growth.

Randall gave a very slight sneak preview, advising that later this year Mack will reveal “something that will help us” in the on-highway market. He added that the company remains committed to maintaining its strong position in vocational sales as well as growing its business with regional fleets.

John Walsh, vice president of global marketing and brand management, noted that the driver shortage remains a critical factor holding back the over-the-road industry. “We hear all the time that ‘We’d but more trucks if we had more drivers.'"

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Mack Thinks Class 8 Market Will Stay Strong

Truck-Body Builders  /  May 19, 2017

While Mack Trucks expects total Class 8 production volume will reach 215,000 units for 2017 – mirroring projections by other industry analysts – the OEM also believes that “underlying demand” for heavy trucks is stronger than many think, meaning that the market should exit 2017 stronger than when it entered the year, with manufacturers ramping up to build more equipment as time goes on.

“The market is good,” explained Dennis Slagle, Mack’s president and executive vice president with its parent company, the Volvo Group.

“We’ve come out of a long correction in the long-haul sleeper and daycab segments, while vocational sales continued to do well. That played to Mack’s strengths so we had a good first quarter this year.”

High inventory levels were one reason for that “correction,” he said, with virtually all of it comprised of on-highway Class 8 trucks.

But inventory peaked in October 2015 and has now been reduced to what Slagle called “a healthy level” and that OEMs have now positioned their factories to build to customer demand.

“We’re looking at some sort of ramp [up] to adjust to market conditions,” he emphasized. “Underlying demand is healthier than last year. We also think the business-friendly environment of the Trump administration will help if he gets through the mismanagement of the [federal] bureaucracy and gets back on track to focusing on the economy.”

Jonathan Randall, Mack’s senior vice president of sales, added that Mack grew its market share in every one of its segments last year – on-highway, regional, vocational, etc. – for a total gain of about one percentage point, which, “by all accounts is putting Mack on a roll.”

He noted that the OEM plans to expand on its “growing foothold” in the long-haul market with a product announcement slated for later this year, alongside plans to keep growing its regional business while maintaining its position in the vocational segment.

“We see the same [growth] trends we experienced last year occurring this year,” Randall pointed out.

Part of that growth trend includes faster adoption of Mack’s proprietary mDrive automated mechanical transmission (AMT), stressed Roy Horton, Mack’s director of product strategy.

He said the mDrive is being spec’d in 80% of the OEM’s Pinnacle axle back highway models, 60% of its Pinnacle axle forward models, and 20% of its Granite conventional trucks – with Randall noting that the backlog for mDrive gearboxes spec’d in Granite vocational models is now at 30% for 2017.

Overall, Horton said AMTs and fully-automatic transmissions are now being spec’d across 80% or more of all Mack’s models, with only 15% to 20% of orders requesting manual transmissions.

“We sell more Eaton manual transmissions on the highway side of our business, while our proprietary Maxitorque [manual] is the predominate selection on the vocational side,” he added.

Other trends Mack touched on during its Charleston conference included:

• Slagle believes demand for trucks that run on liquid natural gas or LNG “is dying” while demand for compressed natural gas or CNG-powered trucks “is staying pretty steady.”

• While that is promising, he added that diesel remains a “foundational fuel” as it is powerful, clean, and fuels 3.5 million vehicles in the U.S. served by 60,000 filling stations across the country. “Diesel is going to be with us for a while,” he stressed.

• Horton noted that demand for engine displacements greater than 13 liters is declining rapidly across the Class 8 segment. In 2009, he said, 56% of Class 8 trucks had engines with displacements greater than 13 liters; by 2016 that dropped to 40%.

• John Walsh, Mack’s vice president of global marketing and brand management, noted that the difficulty of finding drivers remains an “underlying theme” among the OEMs customers. “The hard part is putting into numbers just how many more trucks the industry would sell if it had enough drivers,” he said.

• Randall noted that OEMs remain supportive of Phase 2 greenhouse gas (GHG) rules and that Mack will not change its GHG-based product plans going forward. “They will help us meet customer demand for more fuel economy,” he explained.

• However, Slagle stressed that it remains “very challenging” to get Class 8 trucks to meet the GHG standards. “Make no mistake, this is costing a lot of money and the end user must embrace that as well,” he pointed out.

• David Pardue, Mack’s vice president for connected vehicles and uptime services, said more than 55,000 Mack trucks are now on the road equipped with the OEM’s GuardDog Connect telematics system. Even legacy models can now be upgraded with a similar telematics function via its new partnership with Geotab.

• Pardue added that 91 dealers now certified as “uptime centers.” At those locations, repair diagnostic times are down an average of 70%, repair times in total are down 21%, shop efficiency is up 24% and “check in” time for repairs is down by over 40 minutes.