North American Truck (Class 8) Engines are Shrinking

Strategic Analysis of Engine Downsizing Trends of

North American Heavy-duty Truck Manufacturers A 2% to 3% Reduction in Class 8 Truck Engine Displacement Expected by 2018

NAAF–18

December 2012

2 NAAF–18

Research Team

Bharani C. L. Industry Analyst

Automotive & Transportation

(91.44) 6681.4121

[email protected]

Ananth Srinivasan Senior Research Analyst


(91.44) 6681.4125

[email protected]

Lead Analyst Contributing Analyst

Research Director

Sandeep Kar Research Director–Commercial Vehicles


(1) 416.490.7796

[email protected]

Strategic Review Committee Leader

Sarwant Singh Partner


(44) 207.915.7843

[email protected]

mailto:****@frost.com





mailto:[email protected]

mailto:[email protected]



3 NAAF–18

Table of Contents

Section Slide Number

Executive Summary 4

Research Objective, Scope, Methodology, and Background 17

Definitions and Segmentation 24

Mega Trends and Industry Convergence Implications 30

Market Dynamics and Impact on Powertrain Technologies—North America 35

HD Engine Downsizing in North America—Overview 49

Engine Downsizing Strategies—North America OEMs 64

Conclusions and Strategic Recommendations 89

Appendix 94

SuperTruck Program—Key Insights 95

4 NAAF–18

Executive Summary

5 NAAF–18

Powertrain Downsizing—Key Findings

• Weighted average engine displacement is expected to shift from 13.7 to 14.1 liters (L) in 2011 to

13.4 to 13.7 L by 2018, amounting to 2 to 3 percent downsizing. A corresponding shift in power

density is expected to be at 6 to 8 percent, increasing from the current level of 36.6 bhp/L to 38.9

bhp/L. Technology advancements are enabling 11 L engines to deliver 380 to 420 horsepower (HP).

1

2

3

4

• Key market drivers include changes in freight movement patterns, increasing urbanization, and

penetration of natural gas and hybrid commercial vehicles.

• A strong used truck market and possible introduction of mega-trucks in the long term are expected

to be the two major market restraints.

• Engine downsizing is expected to be higher in the vocational and regional/local haul segments

when compared to the line-haul segment.

• The share of larger engines in the line-haul segment is expected to decrease as a result of the

“trucks cubing out before weighing out” trend.

• All heavy-duty original equipment manufacturers (OEMs) interviewed have shown varying degrees

of preference for downsizing, OEMs’ activities are expected to show results from 2014 onwards

and will be driven by continued fuel price volatility and rising adoption of CNG/LNG and hybrid

heavy-duty trucks.

• This rising preference for downsizing is indicative of an “OEM push” rather than a “market pull” in

the North American heavy-duty engine market.

Source: Frost & Sullivan analysis.

Heavy-duty Engine Market: Key Takeaways in North America, 2012

6 NAAF–18

Powertrain Downsizing—Big 5 Predictions

1

Engine downsizing is gaining preference in the North American heavy-duty (HD) truck industry. In

conjunction with other advanced technologies, this is expected to drive reduction of fuel consumption and

emission by at least 20 percent by 2018. This is also expected to provide flexibility in engine right-sizing

for major HD OEMs, which are increasingly adopting platform-based truck production.

2

Weighted average reduction in engine displacement is estimated through OEM/vocation-based analysis to

be between two to three percent for the industry. In 2011, the weighted average displacement was 13.7 to

14.1 L, which by 2018 is expected to shift to 13.4 to 13.7 L. Power output for the same period is expected

to increase from the current 400 to 520 HP to 425 to 540 HP range.

3

Dominance of 15 L engines is expected to continue in the Class 8 long haul segment, although its share

within the long haul segment will decline. Driven by factors such as the downsizing of activities of OEMs,

growth in the regional/urban haul segment, Cummins Inc.’s larger role in the 12 to 14 L range, vertical

integration within the industry, and regulatory pressures, the installation of 12 to 14 L engines is expected

to increase and come on par with 14 to 15 L engines by 2018.

4

Daimler trucks and Volvo trucks are two participants expected to be the strongest proponents of

downsizing in the forecasted period. Navistar Inc. will pursue increased downsizing activities post 2015,

owing to its recently adopted SCR-based emission reduction strategy. Cummins Inc. is expected to

increase downsizing activities gradually from 2013 until 2018.

5

Key factors such as the rising proliferation of CNG/LNG trucks; the rising utilization of technologies such

as downspeeding, advanced turbocharging, waste heat recovery, and in-cylinder improvements; and the

rising proliferation of semi-automatic transmissions are expected to bridge the demand-supply gap for

downsized engines. Source: Frost & Sullivan analysis.

7 NAAF–18

Technology

Description

Level of Industry

Interest

Dependency

Rating

Expected End-

User Benefit

Key OEMs

Advanced in-cylinder

improvements Cummins, Daimler, Navistar

Downsizing Volvo, Daimler

Downspeeding Daimler, Navistar, Paccar,

Volvo

Hybridization Daimler, Navistar, Paccar,

Volvo

WHR Daimler, Volvo, Navistar,

Cummins

Turbochargers and

boosting technologies

Daimler, Navistar, Paccar,

Volvo, Cummins

Advanced after-

treatment

Daimler, Navistar, Paccar,

Volvo

Engine prognostics Daimler, Volvo

LEGEND High Medium-High Medium Low

Note:1. All ratings are qualitative.

2. Ratings are a combination of F&S analysis and

market research.

Advanced Powertrain Technologies—Comparative Outlook In-cylinder Improvements and WHR Emerge as Best-Fit Technologies at Present; Downsizing, Downspeeding,

and Turbo Technologies Expected to Gain Preference by 2018


8 NAAF–18

Convergence of OEM capabilities and end-

user preferences

Advanced Powertrain Technologies—Benefit versus Barriers Future Truck Powertrain Will Leverage Multiple Solutions for Fuel Efficiency Enhancement; Downsizing

Emerging as a Key Ingredient of an Integrated Solution

Benefit to Industry Medium High

1

Hig

h

Me

diu

m

3 2

4

5

6

Te

ch

no

log

y B

arr

iers

7 8

• Independent engine technologies capable of delivering

significant improvements in engine/vehicle efficiency

• Key focus area for all HD OEMs

• Technological advancements in these areas are easily

deployed across product ranges, thereby improving their

RoI ratio. Legend: 1—advanced in-cylinder improvements; 2—

downsizing; 3—downspeeding; 4—hybridization; 5—WHR;

6—turbochargers and boosting technologies; 7—advanced

after-treatment; 8—engine prognostics

• Highly inter-dependent technologies with high-end

user/industry benefits

• Driven by regulation, after-treatment and downsizing

technologies require high capital investment from the

OEMs to accomplish desired levels of benefit.

• Expected to continue being key ingredients of the long-

term strategy of all HD OEMs

• Downspeeding is emerging as a major focal point for

OEMs to enhance fuel efficiency, sometimes in

conjunction with and also independent of downsizing.

Least

preferred zone

Most preferred

zone

Note: Representation is only for indicative purposes.

Mapping is based on primary and secondary research. Source: Frost & Sullivan analysis.

9 NAAF–18

7.9

7.8

8.4

7.6

8.2

7.9

8.1

7.5

In-cylinder improvements

Downsizing

Downspeeding

Waste heat recovery

Turbochargers and related

boosting technologies

Advanced after-

treatment

Engine prognostics

Hybridization

Note:

1. Ranking is on a scale of 1 to 10,

with 10 being most preferred,

and 1 being least preferred.

2. Weighted average ranking used

as representative of industry.

Individual OEM level rankings

are detailed in respective OEM

profiles.

Advanced Powertrain Technologies—Weighted Average Preference Ranking OEMs’ Preference Ratings for Various Technologies Reveal Downspeeding, Waste Heat Recovery, and

Advanced After-treatment as Top Three Most Focused Technologies

• Downspeeding emerges

as top preference

across all OEMs.

• WHR is critical due to

significant benefits the

technology offers.

• All OEMs are expected

to focus on after-

treatment technologies,

owing to regulatory

mandates.


Heavy-duty Truck Engine Market: Weighted Average Preference

Ranking of Advanced Powertrain Technologies by Key OEMs,

North America, 2011

10 NAAF–18

Heavy-duty Powertrain Configuration—Future Blueprint Three Percent Reduction in Engine Size Driven by 5 Percent Improvement in Power Density Will Usher

Right Sizing of Engines in North American Class 8 Trucks

* Note: All data is proprietary F&S estimates. Weighted average numbers are used, and serve only as representatives of downsizing and

related activities in the industry.

Parameter Baseline

specification*(2011)

Expected future

specification* (2018)

Key Insights*

Engine displacement 13.7 L–14.1 L 13.4 L–13.7 L 2 to 3 percent reduction

High-end Engine

Power 400–520 bhp 425–540 bhp 4 to 6 percent increase

Engine torque 1250–1650 lb. ft. 1300–1750 lb. ft. 4 to 6 percent increase

Configuration In-line 6 cylinder In-line 6 cylinder

Cylinder de-activation being

tested for mid- to long-term

implementation

Turbo technology Predominantly VGT Predominantly VGT Electric turbo-compounding

expected by 2018

Transmission • Predominantly

manual

• Large proportion of

third party

transmission

offering

• Rising penetration of

AMT

• OEM proprietary

transmission as

standard

Increasing market trends

toward optimized

proprietary engine-

transmission-axle offering

Brake thermal

efficiency 42 percent 50 percent or above

SuperTruck program

expected to be a major step

toward BTE improvement


11 NAAF–18

Median range

Analysis of Key Design Parameter Ranges for HD Engine Market, 2011–2018 Powertrain Downsizing Pushing Weighted Average Engine Displacement to Under 14 L in Class 8 Trucks by

2018

9 10 11 12 13 14 15 16

9 10 11 12 13 14 15 16

Displacement (in L) Torque (in lb. ft.)

2011

2018

2011

2018

2011

2018

Power (in bhp)

300 350 400 450 500 550 600 650

300 350 400 450 500 550 600 650

1100 1250 1400 1550 1700 1850 2000 2150

1100 1250 1400 1550 1700 1850 2000 2150

13.7 L–14.1 L

13.4 L–13.7 L

2%–3%

reduction

400–520 bhp

425–540 bhp

4%–6%

increase

1250–1650 lb. ft.

1300–1750 lb. ft.

4%–6%

increase


Heavy-duty Truck Engine Market: Diesel Engine Market Overview, North America, 2011

12 NAAF–18

Voice of Customer Research (Next Five Years) In 2012, 1 in 5 Fleet Managers of Top-100 Class 6–8 Truck Fleets in the United States Anticipate Spec’ing

Downsized Engines; In spite of Being a Small Fraction, This Shows a Noticeable Market Trend

3%

20%

91%

0% 20% 40% 60% 80% 100%

Smaller trucks withsmaller displacement

engines

Trucks in the samevehicle weight class

with smallerdisplacement engines

Trucks in the samevehicle weight classwith similarly sized

(displacement) engines

Percentage of

each choosing

only this

response

86% 45% 0%

Vocational 93% 29% 14%

On Highway

91% 19% 1%

Base: All 2012 respondents (n=100).

Q34. Thinking about your fleet's vehicle purchases in the next five years, please select all of those which you

anticipate buying. (Multiple response) Source: Frost & Sullivan analysis.

Note: Data sourced from Frost & Sullivan Customer Research

2012.

Heavy-duty Truck Engine Market: Fleet Vehicle Purchase Intentions, United States, 2012

13 NAAF–18

Source: Daimler, Frost & Sullivan analysis

Case Study—Cascadia Evolution Significant Improvements Without the Need for Downsizing, Indicating Further Improvement Potential If and

When Downsizing is Introduced

Engine

Transmission

Detroit DD15

( 100 lbs. lighter

than previous

DD15 engine)

• GHG 2014 norms compliant

• Asymmetric turbocharger

• Next-generation amplified

common rail system

• Single filter system (which is

expected to double the change

interval to 100,000 miles)

DT12 AMT

Detroit drive

axles

Axles

• Proprietary transmission based

on second generation AMT in

Daimler E.U. trucks

• Two pedal AMT, featuring

pneumatic clutch and shift

actuator

Aerodynamics

• Improved frontal area aerodynamics, including new air

dam, hood-to-bumper fill

• Integrated antenna, elliptical shaped mirrors

• Chassis side fairings, and 20-inch side extenders

System Description Key Improvements

Cascadia

Evolution shows

the success of

Daimler’s

vertical

integration

strategy

Using Evolution

as a base and

downsizing as

a strategy,

Daimler can

further enhance

power density

and fuel-

efficiency of its

engines

14 NAAF–18

Research Scope, Objectives, Background, and

Methodology

15 NAAF–18

Research Scope

Heavy-duty Commercial Vehicles Vehicle Type

2012 to 2018 Forecast Period

2008 to 2018 Study Period

2011 Base Year

North AmericaUnited States, Canada Geographical Scope


Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Class 8 truck

production

(in ‘000)

238.5 248.1 245 305.4 325.4 287.2 299 318 327.9 340.1

Heavy-duty Truck Engine Market: Partial List of Forecast

Database North America, 2011–2020

16 NAAF–18

Research Aims and Objectives

Objective

To understand the macro-trends necessitating fuel efficiency improvements and emission reductions.

To outline market drivers and restraints, industry challenges in downsizing, and their key benefits

Compare and analyze the powertrain downsizing strategies of major HD OEMs in North America

Predict technology and market trends that will shape downsizing and will be shaped by downsizing with an aim to offer strategic insights to facilitate decision making

Source: Frost & Sullivan analysis..

Aims

To understand and analyze the extent of engine downsizing that will shape engine design in North American heavy-duty trucks

17 NAAF–18

Key Questions This Study Will Answer


How is the North American heavy-duty engine market expected to evolve, and what would be the

best-fit engine specification for future heavy-duty trucks?

How do OEMs compare, and what are the implications of the downsizing strategy adopted?

What are the downsizing strategies of key heavy-duty OEMs in North America?

What are the key market and technology trends driving the powertrain downsizing scenario?

How does powertrain downsizing fit into fuel efficiency improvement and emissions reduction?

Heavy-duty Truck Engine Market: Key Questions This Study Will

Answer, North America, 2011

18 NAAF–18

Research Methodology

Research Methodology:

Frost & Sullivan’s research services are based on secondary and primary research data.

Secondary Research:

Information is extracted from existing reports and project material within the Frost & Sullivan database,

including data and information gathered form technical papers, specialized magazines, seminars, and

Internet research.

Primary Research:

More than 15 interviews have been conducted over the phone by senior consultants/industry analysts with

original equipment suppliers, regulation authorities, and distributors across the globe. Primary research

has accounted for 80.0 percent of the total research.

OEM: North America

Paccar Inc.

Navistar Inc.

Mack Trucks

Daimler Trucks North America

Volvo Trucks North America

Supplier: North America

Cummins Inc.

MAHLE Powertrain

Eaton Corp.

Allison Transmissions

WABCO


Supplier: North America

Johnson Mathey

Heavy-duty Truck Engine Market: Partial List of Industry Participants, North America, 2011

19 NAAF–18

Vehicle Segmentation

Source: US DOT, EPA, Frost & Sullivan analysis.

Vehicle Classification Definition

Gross Vehicle Weight

Ratings (based on U.S.

DOT Classification)

Light Commercial

Vehicles (LCV)

LCVs represent vans and light trucks. The typical

applications include pick-up and delivery, utilities,

airport operations, facilities management, and

several other vocational applications.

Class 1, 2, and 3

GVWR <= 14000 lbs.

Medium Commercial

Vehicles (MCV)

MCVs represent all types of mid-size trucks,

vans, and buses. The typical application includes

home delivery, logistics, parcel delivery, utilities,

waste and recycle collection, airport operations,

and small and medium school and transit buses.

Class 4, 5, and 6 GVWR

>14000 & <=26000 lbs.

Heavy Commercial

Vehicles (HCV)

This includes all types of large trucks. The typical

application includes line haul freight trucks, refuse

trucks, mining and construction trucks, and other

types of vocations that demand high GVWR

trucks.

Class 7 and 8

GVWR >26000 lbs.

The scope of the study is the Class 8 heavy-duty truck engine market

20 NAAF–18

Key OEM Groups Compared

OEM groups evaluated and compared in this study include the following:


Group OEMs

Cummins Inc. Cummins Inc. North America

Daimler Group Daimler Trucks North America LLC

Volvo Group Volvo Trucks North America, Mack Trucks North America

PACCAR Inc. Peterbilt Truck Company, Kenworth Truck Company

Navistar Inc. Navistar International North America

21 NAAF–18

Legal Disclaimer

Frost & Sullivan takes no responsibility for any incorrect information supplied to us by

manufacturers or users. Quantitative market information is based primarily on interviews

and therefore is subject to fluctuation. Frost & Sullivan research services are limited

publications containing valuable market information provided to a select group of

customers. Our customers acknowledge, when ordering or downloading, that Frost &

Sullivan research services are for customers’ internal use and not for general publication or

disclosure to third parties. No part of this research service may be given, lent, resold or

disclosed to noncustomers without written permission. Furthermore, no part may be

reproduced, stored in a retrieval system, or transmitted in any form or by any means,

electronic, mechanical, photocopying, recording or otherwise, without the permission of the

publisher.

For information regarding permission, write to:

Frost & Sullivan

331 E. Evelyn Ave. Suite 100

Mountain View, CA 94041

22 NAAF–18

Relevant Research

This research is supplemented by our completed and ongoing work in the global truck market, which include

the topics below:

• M657-18: Strategic Analysis of Global Low-cost Truck—Completed

• NA53-18: Strategic Analysis of Platform Strategies of Major Global Heavy-duty Truck OEMs—Completed

• N8CF-18: Strategic Analysis of Class 6‒8 Natural Gas Truck Market in North America—Completed

• NA5E-18: Strategic Analysis of the Global Bus Rapid Transit Systems Market—Completed

• NADC-18: Strategic Analysis of Chinese Hybrid and Electric Transit Bus Market—Completed

• M7BB-18: Strategic Analysis of Medium-Heavy Hybrid and Electric Truck and Bus Market in China and

India—Completed

• N9FF-18: Strategic Analysis of Medium-Heavy Hybrid and Electric Truck and Bus Market in North and

South America—Completed

• M783-18: Strategic Analysis of Medium-Heavy Hybrid and Electric Truck and Bus Market in Europe,

Middle East and Africa—Completed

• N818-18: Strategic Analysis of Growth Opportunities in Global Commercial Truck Industry 2010‒2020—

Completed

• N8AA-18: Strategic Outlook of the Western European and North American Medium- and Heavy- Duty

Commercial Vehicle Transmissions Original Equipment Market


23 NAAF–18

Market Engineering Methodology

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

North American Truck (Class 8) Engines are Shrinking

Automotive

Transcript of North American Truck (Class 8) Engines are Shrinking