For Martin Daum, president & CEO of Daimler Trucks North America (DTNA), it's pretty simple: “Nobody buys a truck because he wants to buy a truck; he buys a truck because he needs to buy a truck.” Daum spoke at the 20th annual Heavy Duty Aftermarket Breakfast and Briefing, presented by the Heavy Duty Manufacturers Assn., during the Mid-America Show.
“We think things are going up,” Daum told the packed room of trucking industry manufacturers and members of the media, noting that “everything at the end boils down to freight,” and GDP growth (which is trending upward) automatically increases freight.
Concerning the nature of the trucking business, Daum focused on the root causes. “The trucking business is cyclical,” he noted. “You can always put off buying a truck for a while. You can delay maintenance for a while, but eventually you have to buy [trucks], and this is what creates cycles.”
“If a market goes down 50% and then up 50%, you are not where you started,” he said. “We are talking about 10% growth in 2010, but that is not actually [long-term] growth, just the avoidance of disaster.”
Put in terms of vehicle sales numbers, Daum sees NAFTA truck sales of about 200,000 Class 6-8 trucks in 2010. “I do not see more than a 10% increase,” he noted, citing some leading indicators as cause for optimism, including the fact that there are now more trucks back on the road again and that the North American fleet is aging and customers are acknowledging that as a problem. “We [DTNA] are sold out until the end of June,” he said, adding that “we should be seeing a 33% increase in 2011.”
Daum also shared some of DTNA's strategies for managing through the cycles and helping customers to do the same. These include product innovation, maintaining a flexible production footprint, strict control of costs, global leverage and expansion, a custom-tailored growth strategy for BRIC [Brazil, Russia, India, China] nations, and sourcing on a global scale. “We did not cut back on product innovation [during the recession],” Daum said. “You cut off your future if you cut off innovation.”