#3

This technological requirement is growing everywhere

Emissions reduction is becoming a global task that no truck or bus manufacturer can avoid. While manufacturers have managed to sharply reduce the pollution coming from modern commercial vehicles, there is still much to do. Strong growth rates are intensifying emissions problems in expanding urban areas. Ever-shorter cycles for new emissions limits, even in the emerging markets, require new solutions – which still vary from region to region. 

Emissions

in focus

worldwide

#4

PRIORITY ON TCO

Throughout the world, truck and bus 

customers agree on one thing: Tough 

competition in the transportation sector is increasingly shifting TCO, or total cost of 

ownership, to center stage. This involves more than just purchase price. Efficiency 

and uncompromising reliability are of 

central importance to low TCO. 

#5

FEWER EMISSIONS – DESPITE MORE VEHICLES

2013 was a record year with 83 million new car registrations. To keep climate goals front and center, emissions scenarios are becoming more demanding – and the tasks more difficult – around the world. While a compact car weighed less than 800 kg 30 years ago, growing comfort and safety needs have driven this figure to 1,200 kg. As a result, efficient lightweight construction is high on the list of measures to cut emissions.

Diversity

under the

hood

#6

MORE THAN JUST ONE SOLUTION

"Downsizing" and intelligent engine management systems are raising the classic internal combustion engine to new levels of efficiency. But the future is diversity. In addition to gasoline and diesel engines, various powertrain technologies, energy sources and energy carriers are establishing themselves – based on customer requirements, intended use or market conditions. The spectrum ranges from alternative fuels, to pure electrically propelled 

vehicles, all the way to fuel cells.

4 questions TO

Torsten Maschke

President Automotive 
Sales & Marketing

A conversation about global trends in the commercial vehicle market, the Asians' strategy and the secrets of success of a global seal manufacturer.

The global momentum for growth will come largely from the Far East in future. How important will the core markets of the so-called triad continue to be to Freudenberg Sealing Technologies? High growth rates naturally attract the attention of the public. But we cannot let the white noise of the media influence our business decisions.

The fact is that we do more than 40 percent of our global business in the "triad" markets. That is more than all the BRIC states put together and is crucial for our long-term success. In coming years, we even expect demand to continue growing in Europe and North America.

The world's largest manufacturers of trucks and buses now COME from China. But the established markets continue to set technological trends. In your opinion, will that change? The Asian commercial vehicle manufacturers are only active in their domestic markets and primarily serve them with low-cost products. That can be seen in the example of Dongfeng in China and Tata in India. But the interest in expanding into the global market is unmistakable. 

A look at the passenger car market reveals what course the trend could take in future. The purchase of faltering European manufacturers, Geely (with Volvo), Tata (with Jaguar/

Land Rover) and more recently Dongfeng (with PSA) have all mapped out how Chinese and Indian companies can transform themselves into technology pioneers in no time at all. They purchase the know-how at a low price and then create an environment that offers enough space, time and financial resources for further innovation. 

This certainly does not apply to trucks to the same degree in light of the consolidation that has already taken place. But one strategy that we might continue to see in the truck and bus market in coming years is the alliance option.

"A global presence 

is the most important basis for success"

Alternative fuels and powertrain technologies have so far played a secondary role in commercial vehicles. Will this change in the future? For heavy-duty trucks, there will be no alternative to the further optimized internal combustion engine for the foreseeable future. Drivetrain electrification in the form of hybrids will, however, flow into the series-production of commercial vehicles. 

But we will always have to deal with conflicting objectives: The additional weight from batteries or hydrogen tanks reduces vehicle payload – and payload is naturally the top priority for many customers. 

We therefore expect to see a variety of alternative powertrains in the van and city cargo fields. Everything is conceivable – from natural-gas propulsion to purely electrical vehicles. But the longer the distances, the greater the tendency to stay with diesels – which incidentally still have considerable potential for development. 

Wir erwarten daher eine Vielzahl alternativer Antriebe eher im Transporter- oder City-Cargo-Bereich. Da ist vom Gasantrieb bis zum reinen Elektrofahrzeug alles vorstellbar. Aber je länger die Entfernungen werden, desto eher wird es beim Dieseltriebwerk bleiben – der im Übrigen noch erhebliches Entwicklungspotenzial hat.

In your view, what factors are crucial for sustained success in the truck and bus market? A global presence is the most important basis for our success as a seal manufacturer. The truck business is very sensitive to changes in economic conditions. Here it is important for us to be able to offset declines in struggling markets with solid earnings from stable markets. That has worked out well for us in the past. 

Our second secret of success is our consistent focus on total cost of ownership (TCO). If there is a theme that unites all of the world's truck and bus markets, it is overall economic efficiency. The factors of "absolute operational reliability" and "exemplary efficiency" are decisive attributes of low TCO levels. Our job is to anchor these issues in the perception of our customers. 

Trucks on track for growth

The economic crisis has had only short-term effects. Since 2010, the global market for commercial vehicles has again been registering strong growth rates. Across all weight classes, annual registrations of 33 million new commercial vehicles are expected by 2015. The share of heavy and medium-duty trucks will be about 10 percent.

Development of the commercial vehicle market

(across all segments)*

BRIC nations in hot pursuit

Since 2006, BRIC nations (Brazil, Russia, India, China) have managed to nearly double their share – from 20 to 38 percent. The share for the triad (North America, including Mexico and Canada, Western Europe and Japan) has declined from 62 to 43 percent in the same timeframe. That puts the triad and BRIC markets at almost the same level.

Development of world market share by market clusters

International key players in heavy 

commercial vehicles in 2010

The unknown global market leaders

With more than 300,000 vehicles, Chinese manufacturer Dongfeng has been the global leader in the heavy-duty truck segment since 2010. There is just one non-Asian company – Daimler Trucks – among the top five. With nearly 200,000 vehicles, the Indian manufacturer Tata is a member of this group, along with FAW (First Automotive Works, China) and CNHTC (China National Heavy Duty Truck Corporation).

(GVW > 6 tons)

WORLD BUS MARKET 2012-2017

in billions of euro (nominal, incl. inflation)

Booming bus market

Through 2017, the global bus market will show steady growth at an annual rate of 5.2 percent, according to a study by consulting firm SCI Verkehr. Annual production is expected to rise to 600,000 units by then. Emerging markets are the engine for growth here as well. Even today, one bus in three is registered in China. The global market leaders also come from this country: Yutong and King Long are the world's largest bus manufacturers. Daimler follows in third place and MAN in sixth.

Source: SCI Verkehr

From the rails 
to the roads

TCO – the most important issue

Trucks and buses have to be efficient. This is essential in the highly competitive business of transporting people and goods. In Western Europe, fuel consumption is responsible for nearly one third of a truck's TCO (total cost of ownership). Gains in efficiency thus boost competitiveness. Repairs and maintenance account for 5 percent. These issues, however, have the potential to put a far more serious burden on operating results, because nothing is more expensive than downtime. 

Overview of TRUCK TCO 

in Western Europe

At the start of the 21st century, Chinese rail transportation had a 69 percent share of all goods transported. In 2010, just a little less than 40 percent was transported by railway – and more than 60 percent on roads. The overall transportation level increased by a factor of 2.5 over 10 years. 

In the EU, the share of transportation on roads has been rising for decades. Factors such as the eastward expansion of the EU have sharply increased goods traffic. The share held by truck transportation is currently 76 percent – and rising. 

Source: BRICS Joint Statistical Publication 2011, National Bureau of Statistics of China

Source: Commercial Vehicles and CO2, ACEA/IVECO, 2011

Cleaner and cleaner

In terms of their transport volume, trucks and buses are becoming cleaner and cleaner. Between 1995 and 2010, manufacturers managed to reduce their CO2 emissions by more than 20 percent. Nitrogen oxide emissions have declined by 60 percent and soot particulates by nearly 80 percent. But there must be further dramatic reductions – especially in nitrogen oxides and soot particulates – to ensure that growing inventory does not jeopardize past gains and that focus remains on the goal of lower pollution in metropolitan areas.

Development of commercial vehicle EMISSIONS

(per tonne-kilometer)

Global goal – different paths

Emissions standards are becoming global: The emerging markets are rapidly catching up. To avoid local climate collapse, regulatory emissions cycles are becoming shorter and shorter. The replacement of old vehicles – an important growth driver – should improve the quality of air and life. As global as the goal may be, the paths to it are often diverse. Global harmonization is not expected to start until 2020. 

Exhaust limits values for commercial vehicles by region

*All figures in grams/kWh

Read more about cleaner trucks