Navistar looks to bump up truck prices by 2%

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Sean Kilcarr, Fleet Owner  /  October 22, 2017

OEM also believes demand for Class 8 sleeper tractors will increase into next year.

ORLANDO. With commodity prices and supplier costs both on the rise, truck and engine maker Navistar will seek to increase sticker prices by 2% – an increase Michael Cancelliere, the company’s president of truck and parts, also believes reflects the “higher value” of the OEM’s product line.

“It is not just about the cost of materials; there’s a value to improved uptime and fuel economy,” he explained during a press conference here at the 2017 American Trucking Associations (ATA) Management Conference & Exhibition (MC&E).

“Think about the value better fuel economy on a daily basis in the long haul segment means over a three to four year trade cycle,” he explained. “Then factor in the benefits of greater uptime. A day of [truck] downtime at the very least is $1,000 on the low side.”

Cancelliere noted that both economic growth and freight volumes are accelerating, especially in the TL segment, where he said “freight is strong, capacity is tight and rates are up.”

Cancelliere added that to date industry orders are up strongly year-over-year: up 14.3% for Class 6-7 trucks, up 39% for heavy trucks and 25.5% for severe service trucks.

He told Fleet Owner that he expects that orders for Class 8 sleeper tractors will be particularly strong heading into 2018.

Still, he stressed that while Navistar “must still be competitive” on price in the commercial truck market, the “real focus” must be on providing more “value” to customers.

To improve on that “value proposition,” Cancelliere noted that Navistar just opened a new Uptime Command Center located at the company's headquarters in Lisle, IL, that will tap a dedicated cross-functional team of specialists and key suppliers to assure 24/7 on-road support for customer vehicles – with the goal of getting vehicles back on the road no later than 48 hours after diagnosing a problem.

“That’s our goal for our Diamond-edged certified dealers; that we diagnose the problem within two hours and then repair it within 8 hours,” he explained. “That’s our focus: to get 80% of those repairs completed in 24 hours and the remaining 20% in 48 hours.”

Cancelliere outlined three key facets of this “uptime mission: Navistar is embarking upon:

• Proactive: The UptimeCommandCenter will tap into the OEM’s OnCommand Connection telematics network that constantly monitors and captures data from more than 325,000 vehicles collectively traveling more than 8.8 million miles per day.

• Predictive: The next step is to craft predictive maintenance strategies that take advantage of OnCommand Connection Live Action Plans, a feature now being pilot tested, which will predict when parts are about to fail before they actually do, and to provide the customer with alerts about potential corrective actions, the potential repair, the parts needed, and the training required to make the repair. Furthermore, if the repair is performed as instructed and the vehicle is under warranty, Navistar would pay for the repair.

• Collaborative: The UptimeCommandCenter is working collaboratively with the International dealer network, to begin offering 24/7 parts and service availability to support uptime. This goal builds on the company's long-standing commitment to 24/7 parts availability, which includes "hot-shot" part deliveries from one of the OEM’s Parts Distribution Centers to the dealer.

To date, Cancelliere said Navistar customers using OnCommand Connection report a 30% reduction in unplanned maintenance.

"The UptimeCommandCenter reflects our steady progress in evolving to a proactive, predictive and collaborative maintenance model," he added. "It builds on the International A26 Customer Uptime Assurance Program, which we launched in August, to signal our confidence in our newest 12.4-liter big bore engine.”

Cancelliere noted, too, that key suppliers such as Meritor, Cummins and Bendix will provide specialists to help staff the OEM’s new UptimeCommandCenter.

“The customer doesn’t see their names, though; they see our badge on our trucks,” he added. “That’s why we need to own the support platform.”

Navistar is also planning to launch what it calls the OnCommand Connection Marketplace on Friday, October 27; a new open-architecture, cloud-based technology e-commerce platform for complete telematics services and a broad range of related driver support tools and will be open to customer-created and third-party apps.

"It is another way we are helping our customers become more profitable," Cancelliere noted. "The OnCommand Connection team developed the marketplace to give drivers and fleet managers centralized and easy access to applications and other resources that aid in day-to-day operations."

He stressed that Navistar’s goal is “to provide our customers with the best overall connected experience and we're doing this by creating products and services that are open to everyone.”

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Navistar to Raise Truck Prices by up to 2%

Heavy Duty Trucking (HDT)  /  October 23, 2017

ORLANDO - Citing rising commodity prices, Navistar has announced that it will raise truck prices by up to 2% in the coming year.

That marginal increase will be offset by the overall value that new model trucks provide to customers, said Michael Cancelliere, president trucks and parts, during a media briefing at the American Trucking Associations annual Management Conference & Exhibition.

“We continually improve our own productivity, but there is a point when suppliers raise costs to us that we can’t just absorb 100% of it,” he said. “We still have to be competitive. It’s a competitive industry.”

The price changes will vary by model, depending on the level of content in the different trucks.

“If you can get better fuel economy on a daily basis over a three-, four-, five-year period, I’m sure that’s worth well in excess of the increase,” Cancelliere said. Every day of downtime is also valued at about $1,000 on the low side, not counting intangible costs such as dissatisfied drivers and shippers. Reliable trucks and effective service networks make a difference there.

The market itself also appears to offer a growing demand for new trucks.

Overall, Class 6 and 7 truck orders are up 14.3% year over year as of August, while heavy vehicle demand was up 39%, and the demand for trucks in severe service applications was up 25.5%, Cancelliere said. Navistar’s share of the medium-duty and Class 8 market has increased 1.4 points year over year, he added.

Economic growth accelerated in the second and third quarter, Cancelliere said, projecting that North America’s market for Class 6, 7, and 8 vehicles will continue to rise.

“Right now (with) the truckload carriers, freight is strong, capacity is tight, rates are up,” he said of the current economic environment and strong orders for sleepers.

Last week, Navistar secured a $200 million order from U.S. Xpress, and he says another unnamed large fleet has placed a big order of its own.