As we think about what to expect for 2012, I have assembled a short list of what I am watching in the world of medium and heavy duty trucks. Here are several key trends that we are watching in the truck market in 2012:
1) The world economy is improving (albeit slowly), such that overall truck purchases are expected to rise this year. The United States saw consumer confidence and spending grow slightly in the last quarter and should be able to extend this into 2012, despite continued risks in Europe. Speaking of Europe, the crisis in Ireland and Greece appears largely averted. While other countries remain worrisome (looking your way, Italy), the leadership finally appears to be taking this seriously and 2012 is looking to be a bit smoother than 2011. Interestingly, a cloud that hangs over early 2012 is China’s potential trade deficit with the United States. Slowing exports may mean that China’s employment may not keep up with its growing urban population, which would stunt domestic economic growth. This could potentially add to the economic growth in the U.S. and Europe as imports to China rise. However, expect that the Chinese government will make some policy changes (stimulus or monetary changes) to bolster specific domestic economic sectors – likely producing a positive impact on the truck market in China.
2) We anticipate that 2012 will be the year that hydraulic hybrids will move from demonstration projects to full commercialization. These hybrids will be focused in the largest users of fuel (we have seen them in delivery vans and refuse trucks for the most part so far). This focus will continue, but wider fleet adoption is expected in 2012.
3) Natural gas is growing in heavy applications (transit buses and Class 8 trucks) where the upfront cost of hybrids and plug-in remains a significant hurdle. In 2012, this trend is likely to continue, particularly in European and developing Asian markets. The lower cost of the natural gas conversion and the availability of low cost refueling infrastructure in some markets will push transit agencies in particular to focus on CNG as the fuel of choice.
4) Plug-in electric truck growth has been slow in 2011. A large part of this is due to the industry being focused on the United States, Japan, and China for plug-in trucks. Japan spent a good part of 2011 rebuilding from the disastrous earthquake, leaving China and the weak economy of the United States to lead the global sales of plug-in trucks. China is expected to be flat or even slightly lower in 2012 depending on how item #1 plays out, leaving the focus to remain on U.S. into 2012. However, Pike Research expects that Europe will start to see significant growth in plug-in trucks as well. Smith Electric Vehicles of the U.K. (now part of the U.S. Smith Electric Vehicles) is well positioned for growth, and Daimler and Mitsubishi Truck & Bus (Daimler owns 85% share) have demonstrated the Fuso Canter E-Cell battery electric truck based on one of the most popular truck platforms in Germany. Transit buses are another source of interest in heavy duty electric drivetrains in Europe, with electric bus projects showing up in the U.K. and France.
5) Small fleets will continue to be neglected in 2012. While the big fleets (think Fedex, UPS, DHL, Perolator, Fritolay) capture the headlines because of their large green truck purchases, a large part of the volume in the medium and heavy duty truck market comes from small fleets. These small fleets have been largely ignored by emerging plug-in and hydraulic truck technology, leaving CNG and hybrids to take a lead in this market. This won’t likely change in 2012, though hybrids may start to play a bigger role in this market as Hino, Navistar, and Freightliner continue to push their hybrids through their large dealer networks. However, most smaller fleets will continue to look towards truck and engine downsizing, and alternative fuels as their best options for reducing fuel costs.