Daimler Adapts as Mexico's Demand for Cabover Engine Truck Growing

Date:2017-12-08 Source:trucknews

The Mexican truck market is increasingly shifting towards cabover engine truck designs, and Daimler is adding to its portfolio to address that growing demand.

The Class 8 2528 and Class 6 1217 were launched at the recent Exotransporte truck show in Mexico, and Flavio Rivera, president and CEO of Daimler Trucks Mexico, says many were sold at the show. The Mexican truck market is highly competitive, with 13 nameplates competing for share, and many of them offering cabovers, which prompted Daimler to expand its offerings.

“The Mexican market is moving strongly from a conventional model to a cabover engine business model,” Rivera told trucking press during a discussion here Nov. 29. “Some of the European (manufacturers) are coming to Mexico with COE trucks.”

About one in five trucks sold in Mexico are now cabovers, a growing percentage that totaled 6,139 trucks this year compared to just 4,679 in 2014. Customers, said Rivera, appreciate the maneuverability, ease of use, visibility, and acquisition cost of the cabover designs.

Despite the shift, Daimler continues to lead the Mexican market, with a market share of 39.1% year to date through October. Rivera credits an expansive product line, its financial services business, and a strong dealer network. With more competitors eyeing the Mexican truck market, some bringing low-cost options to a price-sensitive market, Rivera said Daimler is focusing on the real cost of ownership.

“We don’t just sell trucks, we are offering solutions to our customers,” Rivera said. “Some (competitors) have a low-price business model, and Mexico is very sensitive to that. What we are doing, is we are working with customers, telling them about real cost of operation. Real cost of operation means how this product is going to be protected for a lengthy time. We are working with customers, telling them how important is fuel efficiency, maintenance, spare parts, future warranty, so they can see the truck as a long-term investment and don’t just see the initial purchase price.”

The size of the Mexican truck market is similar to Canada, at about 26,000 units, but the average age of the fleet is 18 years.

“Renewing trucks is not an easy task in our country,” Rivera said.

He said more government support is needed to encourage refreshing that fleet. A current program, which offers financial incentives for replacing old trucks with new ones, has had limited success.

Mexico is also home to lots of truck production, including two plants operated by Daimler. Truck exports represent 6.3% of Mexican GDP, Rivera noted. However, he said the company is taking a wait and see approach to NAFTA negotiations, which are underway. It’s business as usual at Daimler’s Mexican truck plants while the discussions are ongoing. Mexico is the world’s eight largest producer of trucks, and the fourth biggest exporter, building about 151,000 trucks in 2016. (www.chinatrucks.com)