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Flexibility, Innovation Spell Growth in Heavyweight Segments

Flavio Rivera - Daimler Trucks Mexico
CEO

STORY INLINE POST

By MBN Staff | MBN staff - Thu, 04/16/2020 - 15:23

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Q: What is Daimler Trucks México’s strategy to compete in the country’s heavy-vehicle market?
A: Our Freightliner brand is the sales leader in Mexico thanks to a strategy based on four elements. First, Daimler Trucks México sells trucks that meet client expectations and requirements thanks to a comprehensive lineup that includes everything from medium-sized to large trucks in both cab-over and long-nosed body styles. The second element is the work we do with our dealership network. We have a professional and strongly customer-oriented dealership network of 87 sales points that have helped us build our presence in the truck market since our arrival to Mexico in 1994. Third, we have the support of a strong financial branch. Daimler Financial Services de México has helped Daimler Trucks cater to the heavy-vehicle segment by offering clients the financing products they need to acquire our vehicles. The last element is a strong workforce that stands out for its in-depth industry knowledge, which helps the company adapt to clients’ needs and requirements.

Q: What advantages can cab-over trucks offer over conventional long-nosed units?
A: Directly comparing both configurations is not a great idea. While there is a slight overlap in some applications, these body styles have unique characteristics that make each type more suitable for certain applications. Rather than betting on one or the other, Daimler Trucks focuses on reducing the total cost of operations of Freightliner trucks on both its cab-over and conventional configurations. This entails reducing emissions and increasing fuel-efficiency and uptimes.

Q: What is Daimler Trucks’ key differentiator in the market?

A: Rather than just selling heavy vehicles, Daimler Trucks accompanies its customers as a business partner that develops flexible products adapted to the client’s transportation needs. For instance, the Freightliner M2 truck can be assembled in 600 different configurations for specific applications, including everything from ambulance and firetruck to mobile crane, concrete mixer and even racing truck.

Q: How important are diesel prices for transportation companies looking to renew their fleets?

A: Following the price increases between 2013 and 2019, diesel now accounts for around 57 percent of the total cost of operations of a cargo truck. With this in mind, Daimler Trucks prioritizes reduced fuel consumption and increased uptime to reduce the total cost of operations.

New technologies are allowing us to extend the interval between shop visits and reduce the number of times our trucks require line maintenance per year. For instance, the Freightliner Cascadia is designed to deliver an average 30 percent longer interval between shop visits, which effectively reduces truck downtime and translates to financial benefits for operators.

Q: How important are Mexican suppliers for Daimler Trucks México’s local assembly operations?
A: To measure the quality of our Freightliner trucks we must consider not only our assembly plant but also our suppliers’ manufacturing facilities. We are convinced of the quality that North American suppliers can deliver and Mexico has a significant share in our regional content. Daimler Trucks México is constantly looking for new opportunities to grow its local supplier base. We organize annual fairs to meet potential Mexican suppliers and remain close to our current partners. Daimler Trucks’ Saltillo plant has a specific space for suppliers to set up shop and produce the components that we need.

Q: What new opportunities can USMCA create for Daimler Trucks in Mexico?

A: Daimler Trucks is ready to adapt to the new rules of origin established in the USMCA. While the agreement will have a positive impact on the industry, we need to remain flexible and adapt to the industry’s new needs and carry on our operations. Daimler is a German company but it has a strong worldwide presence. There is no country where Daimler does not have a commercial relationship with a local company. In that sense, Mexico offers many opportunities for Daimler to market its products based on local needs.

Q: What is Daimler Trucks’ strategy to introduce more efficient vehicle motorizations to the market?
A: Our goal is keep Freightliner at the technological forefront of the Mexican heavy-vehicle market, which means we need to innovate in mobility applications. We are introducing advanced truck technologies to the Mexican market. In 2018, Daimler Trucks started assembling the new Freightliner Cascadia trucks at its Santiago Tianguistenco and Saltillo assembly plants. This vehicle family offers increased fuel efficiencies and meets Euro VI and EPA 16 emissions standards, while also featuring cutting-edge safety equipment. We expect that the combination of these features will make Cascadia the new standard for cargo transportation in Mexico.

Q: What are the main challenges that Daimler Trucks’ new technologies face in Mexico?

A: We need infrastructure, including roads, telecommunications and gas stations, so that advanced technological products can deliver the results they are designed to deliver. Without this, all the investment and effort by Daimler Trucks to promote new technologies will be for naught. For instance, fuel-efficient diesel engines require a sufficient supply of ultra-low sulfur diesel nationwide. Freightliner also offers Enlace Freightliner, which is one of the most advanced telemetrics systems in the Mexican market. This system allows transportation companies to keep track of the performance and location of their trucks, while also detecting component failures so the truck is serviced in time. However, a lack of telecom coverage in some areas prevents a continuous signal on some roads.

Q: How will the introduction of Cascadia impact Mexico’s aging heavy-vehicle park?

A: As more clients adopt this vehicle, transportation companies will increase the efficiency of their fleets. We also expect Cascadia trucks to reduce the average age of Mexico’s freight vehicle park and its average emissions. Mexico’s heavy-vehicle park is made of around 500,000 units, but up to 64 percent of these trucks only comply with EPA 1998 standards. Most of Mexico’s heavy vehicles are outdated by three generations in terms of emissions standards and show mechanical and safety conditions that are less than ideal for transportation companies. All players in this sector are interested in renewing fleets and having a safe and efficient vehicle park.

Q: What are your projections for Mexico’s transportation sector and how does that impact your growth strategy?

A: 2019 was one of the most challenging years in a decade for the Mexican transportation industry. The enforcement of new emissions regulations, the federal government transition of 2018 and the new trade environment related to USMCA will bring several new challenges. Daimler Trucks’ objective is to remain the industry’s sales leader during this difficult process and we plan to inaugurate several new sales points to build a dealership network of 110 sales points by 2021.

Q: What are the most important issues preventing growth in Mexico’s transportation market?
A: The sector needs to attract more people to truck operator positions. According to data from CANACAR, Mexico needs around 50,000 cargo truck drivers. Daimler Trucks is already working with academic institutions and CANACAR to help train more drivers by providing trucks and truck simulators. We are also developing trucks with enticing features that include highly ergonomic cabins that make it more comfortable for drivers to do their job.

 

Daimler Trucks is one of the two heavy-vehicle divisions of Daimler Group in Mexico. The company builds Freightliner trucks at its Saltillo and Santiago Tianguistenco assembly plants and has a dealership network of 87 sales points

Photo by:   MBN

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