Off-road equipment markets are expected to see a slight recovery from the devastating effects of COVID-19 in 2021, according to a report prepared by Power Systems Research that appeared in the October 2020 issue of OEM Off-Highway magazine.
One segment, the construction equipment market in North America has been riding a strong economy over the past few years. The segment was due for a slowdown; however, current worldwide economic conditions have caused a rapid cycle to reset in the construction industry. Government is committed to support the demand in the sector by investing heavily into infrastructure. We have yet to see any new level of demand, but we expect to see signs of the new normal in H2 2020 and early 2021. PSR
The Sany Group has taken a major step in the electrification of the heavy truck market segment with the launch on Aug. 30, 2023, of Sany Magic Tower Energy Co., Ltd. The business plan includes battery sales, battery parts sales, new energy vehicle waste power battery recycling and cascade utilization, artificial intelligence basic software development, data processing and storage support services.
The blue ocean market of new energy heavy-duty trucks is about to experience explosive growth. “Blue ocean” refers to a business approach that focuses on creating a new, uncontested market space rather than competing in an existing market, which is often saturated and competitive. In a blue ocean, the competition is irrelevant because the brand or company is establishing a market where none existed before or is radically differentiating itself in an existing market.
LG Chem says it will build a cathode material plant for automotive battery materials in Gumi, central South Korea. LG Chem has the second largest automotive battery business in the world. They will continue to invest in increasing production in the materials field to meet the increasing demand and plans to start mass production by 2025 and will build a dedicated line for cathode materials with high nickel content, called NCMA, which can increase the output of batteries.
LG Chem’s new plant will be its fourth; it has two cathode material plants in operation in Korea and one in China. The current production capacity is 80,000 tons. LG Chemical produces its own cathode materials, separation membranes, and adhesives, and supplies them to LG Energy Solution, its battery subsidiary. LG Chem is working with Toray Industries, Inc. to secure the amount of separation membrane to be procured.
Editor’s Note: This report includes a conversation with Miguel Elizalde Lizárraga, the executive president of ANPACT (the National Association of Bus, Truck and Engine Manufacturers) and a visit to the Expotransporte 2022, the largest truck show in Latin America.
Lorena Violante
ANPACT represents the trucks, buses and engine manufacturers in Mexico. It participates actively with government organizations and other important related associations to ensure the truck and bus industry gets enough support, incentives, alliances, agreements and information to grow in the local market. Also, to continue with their outstanding role as one of the most important exporters of heavy duty vehicles globally.
The ANPACT gathers the most important trucks, buses and engine manufacturers in Mexico such as Kenworth, Freightliner, International, Mercedes Benz, Man, Volkswagen, Scania, Dina, Mack, Volvo, Isuzu, Hino, Detroit and Cummins.
During our conversation, Elizalde provided timely insights into the Mexican transportation industry and the major market challenges this country is facing today.
Chris Fisher
Vehicles manufactured in Mexico produce an important impact on the country’s economy, logistics and mobility. For example, 71% of the foreign trade value is moved to the US through heavy duty trucks. Much of the movement of goods in Mexico is through trucks, and people use buses as their main transportation.
According to ANPACT´s August statistics, manufacturers produced a total of 127,858 heavy duty vehicles from January through August this year. This is 18% more than 2021 production. Through August, export volumes increased by 15.7% (106,824 units) compared to 2021. Retail demand has increased so far by 20.5% (25,196 units).
Current challenges the transportation industry is facing today in Mexico include road safety, environmental regulations implementation, supply chain lead times, driver shortage, e-commerce, vehicles renewals, safety and energy infrastructure.
Daimler Truck and Deutz have entered a strategic partnership to manufacture engines. Under the plan, Daimler Truck acquires 4.19% of the shares in Deutz AG, in return for which Deutz pays for access to Daimler Truck internal combustion engines.
The move is a consequence of Daimler’s decision to stop investing in the development of their medium duty engines (MDEG Series) from 5.1 to 7.7 Litres. At the same time, Deutz will be able to access Daimler technology and further develop it for off-road applications, such as construction and agriculture machinery. The heavy-duty engines will continue to be manufactured by Daimler Truck at the Mercedes-Benz plant in Mannheim and be delivered to Deutz to complete the engine system. Production of the medium-duty engines is expected to take place at Deutz in 2028.
In 2022, the penetration rate of new energy units in the commercial vehicle market exceeded 10%, and the penetration rate of heavy-duty trucks was close to 5%. The new energy subsidy policy was scheduled to be withdrawn at the end of 2023, but data for the January to October period is basically the same as the previous year. The share of new energy units for the commercial vehicle segment is far lower than the market share of 30.4% for new energy passenger vehicles.
With the accelerated adjustment of China’s transportation structure, it is expected that by 2025, the national railway and water freight volume will increase by 10% and 12%, respectively, compared to 2020, while the road freight volume will relatively decrease. In this context, bulk and ultra long-distance road transportation will gradually exit the market, and the advantages of short and point-to-point road trunk transportation with radii of around 500 kilometers and 300 kilometers will be further highlighted.
Data from the National Marine Manufacturers Association shows August was another strong month for new powerboat retail sales, which were up 8% year to date on a seasonally adjusted basis compared to a year ago.
New power boat retail sales did slowed in August following increases in the early summer months. Total sales were down 13 percent compared to July, while sales are still strong with increases across all major categories, year to date. Sales of saltwater fishing boats, tow boats, cruisers and yachts each had double-digit growth ranging from 11 percent to 15 percent, compared to 2019. PSR
Editor’s Note: This is an updated report from the Q2 2021 Truck Production Index report produced by Chris Fisher and Jim Downey, Vice President-Global Data Products, in July 2021.
Question: What is the global truck production picture? What is the outlook?
PSR Opinion: Overall, medium and heavy truck demand will finish the year on a strong note, and continued strength is expected into 2022. On-going supply chain disruptions will continue to impact production throughout the rest of the year and likely into 2022.
Question: What kind of global production volume do you expect for this year?
South Korea’s Hyundai Motor Group and LG Energy Solutions said they plan to build a joint automotive battery plant in the United States.
They will split the total investment of $4.3 billion (about 600 billion yen) on a 50-50 basis and plan to start operations by the end of 2025. As conditions for EV subsidies in the U.S. become clearer, several local investment plans are in the works.
The new plant will be built in Bryan County, Georgia. With a standard production capacity of 30 gigawatt-hours per year, it will be able to supply batteries for approximately 300,000 EVs. In addition to Hyundai Motor’s dedicated EV plant in Georgia, the plant will also supply batteries to Kia’s plant in Georgia and Hyundai Motor’s plant in Alabama.
In November, Volkswagen’s TRATON group and Navistar announced a merger agreement in which TRATON will acquire all outstanding shares of Navistar. Previously, TRATON held 16.7% of Navistar’s common shares. The deal is valued at $3.7 billion and is expected to be finalized in mid-2021.
Navistar has been in collaboration with TRATON’s brand MAN for a number of years, primarily with regard to engine development. PSR believes additional engine offerings will be one of the primary goals to improve profitability and long-term market share improvement within the class 8 truck segment.
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