Image credits: Freightliner
/
Analysis

Commercial Vehicles: Results, Trends

By Alejandro Enríquez | Fri, 03/19/2021 - 06:00

Freight and passenger vehicles are at the “core” of the Mexican economy, says Miguel Elizalde, Executive President of ANPACT. A variety of trends, both positive and negative, impacted the sector in 2020, however. First, the overwhelming lack of operational capacity in new plating created a bottleneck that affected sales greatly. The decline in tourism and reduced mobility across cities were also debilitating factors. E-commerce, on the other hand, boosted sales for last-mile delivery vehicles.

As expected, the pandemic dealt a blow to the heavy-vehicle sector in 2Q20. Year-on-year, it brought substantial drops in sales, exports, imports and production. Compared to 2020, production dropped 32.5 percent, exports 31.4 percent, imports plummeted 48.9 percent and sales fell almost 38 percent. "The pandemic has had an impact on vehicle renovation as we are selling 49 percent below last year’s rate. For an economic recovery, we need to bet on vehicle renewal. This will support the sector horizontally," said Elizalde to MBN.

Production

With 98.55 percent of the production, the Top 5 manufacturers (Freightliner, International, Kenworth, Mercedes-Benz Autobuses and Volkswagen Camiones y Autobuses) remained unaltered. As for which took the worst hit, in first place is Mexican DINA with an 87 percent year-on-year production drop, followed by Hino and Volkswagen with a 53 percent drop. Just like light vehicles, the heavy-vehicle sector was not labeled as essential by the Mexican government. When the lockdowns were first imposed, OEMs had to halt production, most of them until mid-May.

"When the pandemic started, our sector was not labeled as essential, which put a stop on sales and only allowed for maintenance operations. It took us two months to be labeled as essential by the federal authorities. From manufacturing to vehicle plating, the entire chain was disrupted," said Elizalde. The leaders in freight truck production were Freightliner, International and Kenworth, while bus production goes to Mercedes-Benz Autobuses, Volvo Buses and Volkswagen Camiones y Autobuses.

Exports and Imports

The Top 3 export leaders also remained unchanged in 2020: Freightliner, International and Kenworth concentrate practically all the exports with a 99 percent share. The main export destination is, by far, the US, concentrating 95 percent of total heavy-vehicle exports. All brands have the US as their main destination except for Volkswagen Camiones y Autobuses, whose main destination is Colombia. Top exporters for trucks remain Freightliner and International, while Volkswagen's bus division ramped up exports successfully in 2020, putting it at the top of the bus segment.

A highlight in exports comes from Mexican DINA, whose exports increased by 100 percent year-on-year in 2020. "The pandemic was a completely unexpected situation. However, there has been a slight but recognizable improvement since July and we have been able to recover the commercialization of all our products. Exports have also helped us a great deal. During these months, we have exported the Hustler model to the US. The Hustler is a cargo truck that we sell to SSA Marine, which asked us to develop this custom-made vehicle to meet all the environmental requirements in the state of California," says Ararggo Gómez, Executive Vice President of DINA.

Imports show an entirely different side of the market. Here, positions were affected by the pandemic. Scania fell from being the No. 3 importer to No. 5 in 2020, while Freightliner and Volkswagen climbed to the third and fourth places respectively. The Top 5 companies (Hino, Isuzu, Freightliner, Volkswagen Camiones y Autobuses and Scania) concentrate 87 percent of imports in the country. The main country of origin is Japan, concentrating 63.16 percent of imports, followed by India (8.4 percent), Brazil (8.11 percent) and the US (8 percent). Top importers of heavy trucks were Hino, Isuzu and Freightliner, while Scania, Man Truck & Bus and Volkswagen Camiones y Autobuses led the bus segment.

Sales

Only 13 brands make up the local industry. The Top 3 market leaders, Freightliner, Kenworth and International, account for 72.07 percent of the market. The first two only sell freight vehicles, while International also sells passenger units. Best sellers of truck vehicles were Kenworth, Freightliner and International, while Mercedes-Benz, International and Volkswagen Camiones y Autobuses were the best sellers in the bus segment.

Alternative-Power Vehicles

Alternative-power vehicles represented only 0.53 percent of total commercial vehicle production in the country in 2020 and most of these are earmarked for the US market (98 percent), with only a small fraction of Kenworth's natural gas heavy-duty trucks (7.5 percent) exported to Colombia. DINA is the only company to produce gasoline freight trucks. Meanwhile, Kenworth is the only company that produces natural gas-powered heavy-duty trucks. Both DINA and Kenworth have produced electric heavy-duty trucks in the country. Particularly, DINA ramped up production of these vehicles in 2020 with 35 units, compared to Kenworth's eight electric units.

Regarding imports, Sweden’s Scania and Japan’s Hino are betting on alternative-power heavy vehicles. Combined, they represented 5.1 percent of accumulated commercial vehicle imports between 2018 and 2020. With 4.2 percent, Hino has bet on hybrid freight trucks. Scania, on the other hand, has bet on natural gas freight trucks and buses, with 0.9 percent of accumulated imports.

Taking a closer look at the numbers, alternative-power commercial vehicles represented only 2 percent of imports in 2018, growing to 5 percent in 2019. Despite the pandemic, they reached 13 percent of total imports in 2020. “Our slogan is ‘driving the shift,’ which is toward more sustainable transportation. At some point, we will migrate to new technologies, such as natural gas and electric vehicles. Within our portfolio, we have Euro V and Euro VI models available for the Mexican market. Approximately one-third of the vehicles we sold in the country in 2020 were vehicles fueled by natural gas,” says Alejandro Mondragón, CEO of Scania México.

 

Photo by:   Freightliner
Alejandro Enríquez Alejandro Enríquez Journalist and Industry Analyst