etruck.com.au

As the Australian economy starts to pick up, businesses here have come through the global financial crisis relatively unscathed, when compared to those in other parts of the world, especially in the US and Europe. From the transport industry’s point of view some of the problems created by the crisis in the truck industry may have a knock-on effect for trucks on sale here in Australia.

Firstly, Kenworth’s, preferred, two engine strategy may be under threat. The Paccar company are very conservative, financially, and as a result of the recession, have delayed the commencement of production of the Paccar MX engine in the US for a year. In Australia, this engine was to become the alternative engine choice to Cummins after the disappearance of the Caterpillar engine this year. In an effort to reduce costs, Paccar will not produce any engines until they can afford the capital outlay.

This may not cause many problems for Kenworth dealerships but truck buyers who are not fans of the big red engine may look to other North American brands who can offer an alternative in the form of the Detroit Diesel.

Confusion reigns at the headquarters of the Navistar Corporation, makers of International Trucks, as they engage in a legal battle and a PR war of words with the rest of the truck manufacturing industry in North America. They are the only engine maker to offer a non-SCR heavy-duty diesel engine to meet the new US EPA 2010 exhaust emission regulations coming up next year. To a lot of observers in the US this plan lacks credibility and doubt has been cast over the practicality of reaching the extremely strict emissions limits just with high pressure fuel injection and a high percentage of EGR.

Navistar have embarked upon a legal battle to prove the SCR technology is environmentally dangerous and should not be endorsed by the US Environmental Protection Agency. They have pitted themselves against all of the other truck manufacturers in an effort to justify their decision to rely on an EGR solution. This tactic smacks of desperation and if it fails, as it is predicted to do, International Trucks could find themselves in some difficulty. Again, this could affect the viability of the International operation run here in Australia by Iveco.

Further uncertainty is being created by the mixed messages people are receiving from inside and outside of the Caterpillar organisation. In the US, the new Caterpillar branded trucks to be built in a joint venture with Navistar are being played down without a date being set for their release. On the other hand, here in Australia, reports from within Caterpillar suggest the new trucks are not very far away. These claims are being questioned by their competition who have seen little evidence of real trucks appearing in the metal any time soon.

Meanwhile over in Europe, all of the truck manufacturers seem to be having an equally hard time with massive falls in sales over most of their major markets. Although there have been no major casualties of the recession, so far, the troubled economic times have put pressure on some of the larger companies. Scania appear quite safe under the new Volkswagen ownership whereas MAN, also owned by VW, are struggling financially and fighting a corruption court case in the German courts.

Elsewhere in Germany, Daimler have sold a large share of their company to a Middle Eastern investor, suggesting there long-term future will see the ownership pass out of Europe, increasing uncertainty. The Volvo group are also seen to be struggling financially and it has been suggested they may drop the Renault truck brand in the near future, concentrating their efforts on the core Volvo brand in Europe.

As is always the case for buyers here in Australia, we will just have observe from afar. Our preferences and our choices are not important enough on a global scale to affect decisions. It is simply a matter of waiting and seeing what plays out elsewhere in the world and working with what we’ve got as a result.