North American Trailer Technologies Market

Strategic Analysis of North American Semi-Trailer

Advanced Technology Markets Advanced Trailer Chassis, Safety, Aerodynamics, and Telematics Technologies To

Generate Revenues Worth $3 Billion by 2018

North America

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July 2012

Brief Summary

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Contents

Section Slide Numbers

Executive Summary 4

Research Scope, Objectives, Methodology, and Background 15

Definitions and Segmentation 20

Mega Trends and Industry Convergence Implications 24

Total Market -

• External Challenges: Drivers and Restraints 33

• Semi-Trailer Technologies Market Analysis 41

• Forecasts and Trends 77

• Market Share and Competitive Analysis 106

Conclusions and Future Outlook 109

Appendix 112

Key Company Profiles 116

Voice of Customer Research- U.S. Fleet Managers Desirability and Willingness to Pay

for Advanced Truck and Trailer Technologies

135

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Research Objective, Scope, Methodology and Background

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Research Scope & Objectives

Semi-trailers: dry van, reefer, flatbed, tankers Vehicle Type

2012 to 2018 Forecast Period

2008 to 2020 Study Period

2011 Base Year

North America Geographical Scope

Source: Frost & Sullivan analysis.

Semi-Trailer Technologies Market: Semi-trailer Production Unit Shipments, North America, 2012 - 2018

Year Unit Shipments (Annual)

2011 217000

2012 248200

2013 255500

2014 255200

2015 247000

2016 242000

2017 240500

2018 242100

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Research Aims and Objectives

Source: Frost & Sullivan research.

Aim

The aim of this study is to research, analyze, and forecast the North American semi-trailer production and

technologies market.

Objectives

• Provide a strategic overview of the North American semi-trailer market. Including demand analysis, key

technology trends, market trends, market drivers and restraints in each geographical region.

• Determine market size and provide forecasts of trailer demand and breakdown by region.

• Provide forecasts of penetration rate, unit shipment, revenue, and pricing analysis of major chassis

(brakes, suspension and axles), safety systems (ABS, RSC, ATIS, TPMS, and etc), and Telematics

technologies.

• Competitor analysis: Analyze competitive factors, competitor market shares (OEMs), competitive

benchmarking, and product portfolio analysis.

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Research Methodology: Frost & Sullivan’s research services are based on secondary and primary

research data.

Secondary Research: Extraction of information from existing reports and project material within the Frost

& Sullivan database, to include data and information gathered form technical papers, specialized

magazines, seminars and internet research.

Primary Research: More than 10 interviews have been conducted over the phone by senior

consultants/industry analysts with original equipment suppliers, regulation authorities and Tier 1 suppliers.

Primary research has accounted for 80.0 percent of the total research.

Research Methodology

Key OEMs

Wabash National Corporation

Utility Trailer Manufacturing

Great Dane Trailers Inc.

Hyundai Translead

Stoughton semi-trailers


Semi-Trailer Technologies Market: Key Industry Participants, North America, 2012

Key Suppliers

Meritor Wabco

Meritor

Hendrickson

Bendix

Haldex

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Key Questions this Study Will Answer

What is the growth potential for the North American semi-trailer technology markets?

How will the changing trucking industry impact the semi-trailer market?

What are the current technologies and product portfolios of key industry participants?

What are the key market and technology trends for the semi-trailer industry?


What factors are impacting the North American semi-trailer technology markets?

Semi-Trailer Technologies Market: Key Questions This Study Will Answer, North American, 2012

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Definitions and Segmentation

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Study Definitions

Geographic Scope

This analysis will focus on the North American Market:

• North America

• United States of America and Canada

Segmentation Scope

The analysis will focus on the following applications:

1. Semi-trailer Market – OE

2. Semi-trailer Mechanical Systems Market –

Brakes, Suspension, Axles, semi-trailer

Aerodynamics

3. Semi-trailer Soft Technologies Market –Safety

Systems and Telematics

Definition of Unit(s):

• All figures are represented by one single unit

Definition of Prices:

• All prices are reported at the first level of distribution from the supplier to semi-trailer OEM

• Prices are reported in US Dollars

Definition of Revenue:

• Revenues are calculated based on the number of units and the price of a single unit

Forecast Assumptions (North America):

• Forecasts calculations are reported at the OEM level of distribution

• Forecasts for unit shipment and revenue of semi-trailer components are calculated through using a weighted average of 2.15 axles per semi-trailer.


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Definition and Classification: Semi-Trailer Type

Name Definition

Dry Van/Box

Dry van semi-trailers are the most prevalent type of semi-trailer used in the trucking

industry and is frequently used to carry dry products such as boxed goods.

Refrigerated

(Reefer)

Reefer semi-trailers are used to transport temperature critical freight such as

produce. Reefer units rely on an external refrigerator unit and specialty temperature

panels that keep the semi-trailer cold at all times.

Flatbed

Flatbed semi-trailers are used primarily to transport heavy cargo such as heavy

machinery and construction materials. Flatbed semi-trailers must strap their freight

down as it only consists of a load floor and removable side rails.

Tanker

Tankers are used to transport gases and liquefied freight such as crude oil. The size

and volume for tanker capacities vary widely as it typically ranges from 5,500 to

9,000 gallons.

Region Definition Dimensions Common Types

North

America

A semi-trailer is used to

transport freight. It has no front

axle and must be coupled with

a road tractor. In North

America the majority of semi-

semi-trailers have two

“tandem” axles, each with dual

wheels.

Maximum Width: 8.5 feet

Maximum Height: 13.5 feet

Most Common Length: 53 feet

Maximum Gross Weight Limit: 80, 000 lbs

Maximum Weight Per Tandem Axle: 34,000 lbs

Maximum Weight Per Singe Axle: 20,000 lbs

• Dry Van/Box

• Refrigerated

• Flatbed

• Tanker


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Executive Summary

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Executive Summary—Key Findings The Next Generation of Advanced Semi-Trailer Design has been Set into Motion


The proliferation of advanced semi-trailer technologies will be driven by three crucial factors:

strengthening regulatory environment, rising fuel prices, and an aging trailer population 1

Average age of semi-trailers in operation is 8.5 years with the market currently entering into its

replacement cycle as production is expected to reach 248,200 units in 2012. 2

Total revenues for the advanced semi-trailer technologies market is projected to be $ 2.16 Billion

dollars in 2012. 3

The significant impact of CARB’s mandate could result in the widespread adoption of semi-trailer

aerodynamics as market penetration is forecasted to reach 56 percent by 2018 4

The strict standards of CSA 2010 is stimulating the interest in safety systems such as automatic

tire inflation systems which is expected to have a 48 percent market penetration rate in 2018 5

While brake and suspension markets will generate nearly 60 Percent of total advanced

technology related revenues by 2018, and the penetration of aerodynamics improvement

technologies will increase over the 2012-2018 period, the fastest and strongest revenue growth

opportunities will be accorded by safety and telematics technologies

6

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Executive Summary—Market Engineering Measurements Semi-trailer Advanced Technologies Market Revenue Expected to Increase to $2.98 Billion by 2018

Note: All figures are rounded. The base year is 2011. Source: Frost & Sullivan analysis.

Forecast Period

Market Growth

Rate

5.50%

(CAGR, 2012-2018)

Market Stage

Growth

Market Revenue

$2.16 B

(2012)

Market

Units/Volume

Estimate

3.9 M

(2012)

Market Size for

Last Year of

Study Period

$2.98 B

(2018)

Base Year

Market Growth

Rate

14.4%

Semi-Trailer Technologies Market: Market Measurements, North America, 2012

Market Overview

Stable Increasing Decreasing

Market

Concentration

69%

(% of market share held by

top 3 companies)

Number of Semi-

trailer OEMs

30

(active market competitors in

base year)

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Semi-Trailer

OEMs

Semi-Trailer Technologies Market: Competitive Landscape, North America, 2012

Tier 1 System

Suppliers

Aerodynamics

Suppliers

Telematics

Providers

Hyundai Translead

Utility Trailer

Manufacturing

Wabash National

Great Dane Limited

Partnership

Stoughton Trailers

Fontaine Trailers

Bendix

Hendrickson

Meritor

Meritor WABCO

Haldex

Smart Truck

ATDynamics

Aerofficient

Freight Wing

Laydon

Composites

Star Trak

Qualcomm

SkyBitz

ID Systems

PAR LMS

Eaton Ridge Corp. Transcore

Executive Summary—Competitive Positioning of Key Industry Players


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0

1

2

3

4

5

Advanced Technology Integration

Supplier Virtual Integration

Telematics Focus

Advanced Safety Focus

Advanced Chassis Technology Focus

Aerodynamics Enhancement Focus

Trailer Body Material Focus

Advanced Technology Market

Mover

Wabash

Great Dane

Utility


Note:

• Comparison based off of Frost & Sullivan analysis of market.

• Indices are representative, and are for comparative purposes only.

• Indices on scale of 5;1 being lowest, 5 being highest.

Executive Summary – Competitive Comparative Analysis Competitive Advantage of Top OEMs Achieved Through Consistent Focus on the Introduction of Advanced

Semi-Trailer Technologies to the Market

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Semi-Trailer Market Drivers and Restraints Two Major Factors in CSA 2010 and Replacement Cycle Driving the Semi-Trailer Market in the Medium-term

Denotes long-term impact

Denotes current impact Source: Frost & Sullivan analysis.

Driv

ers

R

estra

ints

Driv

ers

R

estra

ints

CSA 2010 driving

adoption of advanced

technologies

Aging semi-

trailer

population Synergies

between truck and

semi-trailer OEMs

Fuel price

volatility

Favorable

freight

transport

trends

Fleets showing

greater demand

for soft

technologies in

semi-trailers

Too many advanced

technologies chasing

too few consumer

dollars

Longer

equipment life

cycle

Vertical integration restricting market

penetration potential for independent

suppliers

Volatile economic

environment

Lack of sufficient

legislative and ROI

support delaying growth

spurt in telematics and

safety systems

Semi-Trailer Technologies Market: Key Market Drivers and Restraints, North America, 2012-2018

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$429,187,936

$972,756,750

$333,583,250

$122,474,290

$191,548,350

$115,539,246

Braking Suspension Axle Aerodynamics Safety Telematics

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000


Air Disc Brake Drum Brake Air Ride Spring

Axle Aerodynamics ABS RSC

ATIS TPMS Telematics

Semi-Trailer Technologies Market: Total Unit Shipment/Revenue Forecast,

North America, 2012 and 2018

Executive Summary—Total Market Unit Shipment/Revenue Snapshot Semi-Trailer Technologies Market is Expected to Reach $ 2.98 Billion in 2018

Note: All figures are rounded; the base year is 2011. Source: Frost & Sullivan analysis.

Note: Graph in center represents unit shipment data for 2012.

Outside graphs represent revenue for 2012 and 2018.

2012

$454,409,595

$1,332,518,400

$412,780,500

$187,240,140

$418,929,840

$178,925,904


2018

Un

it S

hip

men

t

Technology

~ $ 2,165,089,822 ~ $ 2,984,804,379

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Special Focus (Soft Technologies): Trailer Telematics Market Snapshot Clear signs of development, as vast majority of trailer population is not penetrated. Increased opportunities for

telematics vendors to provide customized solutions and services to assist fleets with end-to-end asset visibility

Trailer Telematics Market : Trailer Telematics Subscriber Penetration (North America), 2012 & 2018

Trailer Telematics Market : Key Market Participants and Communication Technologies (North America),

2012

Trailer Telematics Market : Product and Service Range (North America), 2012

Supplier Manufacturer

Major Telematics

Solution Providers

SkyBitz, ID Systems, Qualcomm,

Star Trak, PAR LMS, TransCore,

Thermo King and others

Communications

Technologies

Satellite > Cellular > Wi-Fi > Multi-

modal

Service Cost

Range ($)

Hardware Cost

Range ($)

Entry Level Mid Level High End

$200 - $350 $350 - $550 $740 - $1400

$4.5 - $10 $10 - $20 $20 - $35

Note : The above is the market average selling price

(vendor buyer) of hardware and services

Note: All figures are rounded; the base year is 2011. Source: Frost & Sullivan

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

2012 2018

Trailer Population

Trailer Telematics Subscriber Penetration

Tra

iler

Po

pu

lati

on

(M

illio

n)

14.0%

20.0%

6,305,000

6,930,750

Year

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Parameters Current Future

Market Status

• The potential size of the total market is vast and not

fully penetrated of the 6.4 million semi-trailers.

• Advanced semi-trailer market is in the launch pad for

robust growth in unit shipments and revenues

Expected to have a steady growth without

any sudden spikes as recessionary

environment still persists

Semi-trailer OEM

Competition

• Almost 80% of the market is consolidated by four

players (Wabash, Great Dane, Utility, Hyundai

Translead)

• 20% of market is highly fragmented (Fontaine,

Stoughton, Vanguard, and others)

Aggressive competition from current top

market leaders looking to provide complete

advanced semi-trailers to end-users.

• Low expectations from fragmented market

group

Solutions

Growing awareness and interest advanced semi-trailer

technological solutions to combat government

regulations and rising fuel costs

Higher levels of awareness among end

users pushing technology penetration

levels towards mid and high levels

Value Proposition

• Suppliers: Nascent market with intense competition

among market participants challenging for market

positioning

• Fleets: Improved productivity, asset monitoring,

operating cost and fuel economy

• Ability to offer customized solution for

various fleet operations and situations

• Prognostics and preventive maintenance

helping fleet achieve optimal efficiency

Barriers to Entry in

North American

Market

Major portion of the market is consolidated with semi-

trailer OEMs and tier 1 suppliers, creating big hurdle in

creating brand identity

Low cost and quality semi-trailer

technologies not expected to be able to

penetrate the market

Executive Summary—Key Conclusions and Future Outlook


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Market Trends Economic Environment Weighing Heavily On Trailer Advanced Technologies Market

Market Trends

Semi-trailer production volume expected to experience short

term growth as the current lifecycle of a large chunk of

semi-trailers is nearing its end

The market is currently not

experiencing growth but a

“recovery” from a recessionary

environment and equipment

replacement needs

The boom in the natural gas industry could fuel a surge in

tanker trailers

All market participants facing downward pressure on prices

from highly price sensitive end-users.

Recessionary environment encouraging the use of mobile

resources to optimize fleet operations and logistics

Reefer semi-trailers are expected to experience slow

growth due to the impact of the Food Safety Modernization

Act.

The continued growth of the semi-trailer market will depend heavily on the recovery of the

overall economy

Product quality, price, financing options and after purchase

service becoming the competitive factors among

OEMs.


Semi-Trailer Technologies Market: Market Trends, North America, 2012–2018

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New technologies will require

maintenance technicians to

adapt and learn new repair

procedures

Semi-trailer OEMs to offer

“intelligent semi-trailers” that

provide fleets added

performance, theft prevention,

real time data from telematics,

and safety enhancements

Vertical integration and

modualization of semi-trailer

components are expected to

become industry standards

The productive lifecycle of new semi-trailers reaching 15 years

if properly maintained

Increasing trend towards synergistic collaboration and

technology development focused virtual integration

between semi-trailer OEMs and component suppliers

Stringent emission and fuel

regulation impetus will drive

R&D and the adoption of

innovative semi-trailer

technologies

Semi-trailer OEMs to increase

focus on lightweight semi-

trailers through enhanced

designs, materials and lighter

components to ensure greater

payload and productivity.

Increasing installation of safety

technologies such as TPMS,

ATIS, RSC, and advanced

braking technologies on

upcoming generation of semi-

trailers

Technology Trends

Technology Trends Growing Awareness of Semi-Trailer Technology Expected to Result in Increasing Adoption

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The Last Word—Five Big Predictions


2

Untethered trailer power management and creation of multiplexing of electronic

communication infrastructure in trailers for better intra-trailer and trailer-tractor

communication will emerge as key R&D focal points for trailer OEMs and suppliers.

3

Diesel fuel volatility and strengthening regulatory environment will lead to fleet managers

and owner-operators pull advanced technologies than OEMs pushing them.

Recessionary/slow growth economic environment to continue posing hurdles to rapid

market adoption.

1

The level of distributed electronics is trailers is increasing benefiting trailer safety,

connectivity, and management. This will necessitate creation of electronic interfaces with

key trailer systems and sub-systems. Trailer telematics poised for rapid organic growth.

4

OEMs will use advanced technologies to differentiate products from competitors. However,

too many technologies chasing too few consumer dollars will make it difficult for OEMs to

choose the right set of technologies for vertical integration.

5 Advanced trailer technologies market to grow at 5.5 Percent CAGR indicating additional

revenue generation equivalent to $0.82 Billion within the 2012-2018 period

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One of Frost & Sullivan’s core deliverables

is its Market Engineering studies. They

are based on our proprietary Market

Engineering Methodology. This approach,

developed across the 50 years of

experience assessing global markets,

applies engineering rigor to the often

nebulous art of market forecasting and

interpretation.

A detailed description of the methodology

can be found here.

Source: Frost & Sullivan research

http://www.frost.com/prod/servlet/me-research.pag

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North American Trailer Technologies Market

Automotive

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