Mercedes-Benz Trucks: Bouncing back in a market of two halves

Mercedes-Benz Trucks fell out-of-step with the prevailing market trend in 2016. Rigid trucks were in greatest demand in the first half of the year, but the truck manufacturer’s strength sat in the tractor sector.

Consequently, it ended the year down 12.5% in a market up 5.3%. In the process, it lost around 1,000 registrations and slipped behind Scania to third in the charts.

However, while the first six months effectively sealed the company’s fate, the second half of the year saw something of a recovery. This was largely expected, according to Mercedes-Benz Trucks managing director Mike Belk.

“The market is always stronger in the second half of the year, which accounts for 60% of registrations versus 40% in the first half,” he says. “We’ve been even more back end loaded than that because the market strength in the first half was in the rigid sector and our product portfolio is stronger in the tractor market.”

Pricing decisions also played a part in the 2016 performance, he adds. “We took a long-term view of stability in our price position; others change more regularly. That has impacts with currency changes but we take a prudent view – customers don’t want to see wild fluctuations in price – and that affected our order take.”

Uncertainly caused by Brexit has had a lesser impact, although it only needs one or two customers to take a pessimistic view of the future and that can have a big effect on registrations. 

While there was a bit of a slowdown into September last year, confidence remains generally high, with some sectors, such as construction and internet shopping, showing a definite pick-up in demand in the fourth quarter and into 2017.

Belk believes long-term prospects are good and predicts the market will be at a similar level to last year’s 46,000 total truck registrations. 

He is confident about the Mercedes-Benz product range and does not plan to chase sales. 

“It’s not about absolute market share; it’s about building on our strengths for sustainable growth,” Belk says.

To achieve that aspiration, he will need to extend penetration into other sectors beyond tractor units. He is targeting a market share in the 20%s (2016 ended at 15.2%) within the next few years, but believes this will not require radical changes, just an improved focus on new truck niches and the commitment of the retail network, supported by head office marketing.

“We have to be cleverer in working out where we are best positioned in each segment,” Belk says. “We will never be the cheapest truck – that’s not us; we won’t chase share for the sake of it.

“But we are in a strong position with our width of range and we are filling niches, for example direct vision with Econic, 8x4 off-road with Arocs, the Unimog and our 7.5-tonne urban delivery Fuso. We even have electric with the eCanter . We have all the bases covered.”

Belk points to visibility standards catered for by the Econic, which he sees extending beyond London as other cities recognise concerns around vulnerable road users.

The construction sector has been a key driving force, but Mercedes-Benz Trucks has recently revealed an Econic urban tractor prototype with deep panoramic windscreen and full-height glazed passenger door for the distribution sector. It will also expand the suitability of the Econic for urban operators by adding a new powershift transmission in the final quarter of the year.

“Safety is something customers are saying they can’t fail to consider when specifying and ordering their vehicle,” says Belk. “There is a clear movement in the market with all types of business and all sizes of truck, urban and long distance.”

Another consideration – and one where Mercedes-Benz Trucks claims to be a “game-changer” – is off-road times. 

At the Hanover CV Show last year, the company unveiled its Uptime product for real-time data logging and fault diagnosis for all new Actros, Arocs and Antos trucks (it will also eventually be rolled out to Econic and Atego and possibly for semi-trailers and bodies). In the UK it went live with March production. 

Uptime consists of a black box which shows fault code patterns allowing Mercedes-Benz Trucks to anticipate vehicle failure to prevent breakdown and speed up any maintenance or repair.

Belk explains: “We have built algorithms in to the software that interrogate data in real time. It will send a signal to our customer assistance centre in Belgium and they will speak to the fleet so we can make a decision about what to do.”

The system has three main benefits: avoidance of breakdown; enable preventative maintenance at the next service to minimise downtime and guarantee parts availability; data sampling to identify patterns. Fleets will be provided with key data which can be used for training purposes; trials have revealed drivers not using the correct powertrain control or not regenerating the DPF, for example.

The system will be fitted as standard to the three truck ranges but it will be up to the customer to decide whether they are switched on. It will cost £10 per vehicle per month for customers already on the Mercedes-Benz service contract, or £20 as a standalone arrangement.

“It is these sorts of areas where we can sell a better proposition,” says Belk. “We can differentiate ourselves in these new areas.”

MD seeks to clear air on approach to diesel trucks 

Mike Belk believes Government and local authorities need to take a “proportionate” approach to air quality regulations when it comes to trucks. 

He points to the huge improvements made on NOx and particulate emissions with Euro 6 and believes the emphasis should be on encouraging people to invest in the cleanest vehicles possible.

“In reality, there is no alternative to diesel for long distance haulage, but we will see the emergence of different solutions for urban distribution – our eCanter 7.5-tonne, for example,” Belk says. 

“It travels 100km (62 miles) on one charge which means significantly lower fuel and servicing costs. And it charges to 80% in less than 60 minutes on fast charge.”

Mercedes-Benz also has a concept 18-tonne electric truck, which is “probably four years away” from production, and Belk believes it can be a pioneer in the development of electric trucks. 

“We stand for leadership in technology,” he adds.

The truck division benefits from the car group’s €5.2 billion (£4.4bn) investment in autonomous driving technology, while its own €1.3bn (£1.1bn) annual R&D truck budget has enabled it to create other solutions, such as the CNG-powered Econic, which is about to go live with Camden Council, and a hybrid Canter.

“I have been surprised by the strength of the feedback for the eCanter and our 18-tonne concept,” says Belk. “We haven’t released pricing but it is commercially viable and our view is that the additional capital cost should be covered within three or four years of the vehicle being on the road from the reduction in fuel and SMR costs.”

He is now looking for a few fleets to run pilots which will enable Mercedes-Benz Trucks to identify any issues, for example, range limitations in real-world conditions.