2010-2014 us heavy truck fleet managers have spoken

2010-2014 Trend Analysis of US HD Fleet Managers’ Preferences

Towards Advanced Truck Technologies Total Cost of Ownership and Downtime Reduction Driving Technology Adoption

NE6D-18

May 2015

BRIEF SUMMARY

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Contents

Section Slide Number

Executive Summary 5

Trend Analysis of Powertrain Technologies 11

Influential Factors of Powertrain Technologies Purchase Process 13

Most Prevalently Used Powertrain Technologies 14

Likelihood to consider Automatic/Semi-Automatic Transmissions 15

Engine Downsizing Trends 16

Decision Making Process for Engine Purchases 17

Anticipated Usage Pattern Changes 18

Importance of Natural Gas Powertrain Technologies-Year-to-Year

Comparison 19

Expected Time Period to Recover Price Premium of Hybrid Trucks 20

Most Important Attributes of Advanced Engine Oil Lubricants 21

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Most Important Attribute in Lubricants Designed for Vehicles with

Emissions After Treatment Devices 22

Trend Analysis of Safety Technologies 24

Influential Factors of Advanced Safety Technologies Purchase

Process 26

Most Prevalently Used Advanced Safety Technologies 27

Active Chassis Control Systems Preferences 28

Relative Importance of Advanced Safety Technology Options for

Heavy Duty Vehicles 29

Influential Factors for Improving ROI of Safety Systems 31

Influential Factors of the Fleet Safety Systems Suppliers Selection

Process 32

Contents

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Contents


Trend Analysis of Telematics Technologies 34

Influential Factors of Telematics Technologies Purchase Process 36

Most Prevalently Used Telematics Technologies 37

Driver Performance Monitoring 38

Highest Monthly Subscription Fee per Truck Willing to Pay for

Telematics Services 39

Interest in Prognostics Displayed by Fleets 40

Interest in Integrating Remote/Prognostics Data 41

Conclusions and Future Outlook 43

5

Executive Summary

6 NE6D-18

Source: Frost & Sullivan

Powertrain Technology Summary

Warranty and

fuel

efficiency Most influential

factors in powertrain

technology purchase

process currently

(2014)

Semi/fully

automatic

transmissions Currently one of the

most desired and

important advanced

powertrain technology

among surveyed fleet

managers

23% Estimated

future

growth rate

in 2015

Convenience

of servicing Primary reason for

selecting OEM

nameplate engines

62% Percent of fleet

managers not

expected to

change their

OEM nameplate

purchase

patterns in 2014

Advanced

synthetic oils Fleets opting for

advanced synthetic

oils owing to

protection of

equipment, reducing

maintenance needs,

and higher fuel

efficiency (2010-

2014)

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Advanced Safety Technology Summary

Inducing

Safe Driving

Practices Most influential

factor in advanced

safety technology

purchase process

Tire Related

Safety

Systems Gaining

significant

increase in fleet

manager interest

Stability

Control

Systems Consistently

most important

advanced safety

technology in

fleets 12%

Estimated

future

growth rate

for ESC in

2015

32% Fleet

managers

expect to use

trailer tire

inflation

systems in

2015

Integrated

Safety

Systems Expected to gain

maximum traction

among fleets in

coming years

Data

Analytics Key factor in

selection of safety

system suppliers

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Telematics Technology Summary

Improving

regulatory

compliance Most influential factor

in telematics

technology purchase

process

Driver

performance

monitoring Currently the most

prevalently used and

most important

telematics technology

in fleets

26% Mean percent

currently using

prognostics in

fleet in 2014

$19.40 Mean monthly

telematics

subscription fee

willing to pay

per truck (2014)

55% Percent interested

in integrating

remote/ prognostic

data with

maintenance

management

system and parts

inventories (2014)

52% Percent of fleet

managers

consider engine

related prognostic

data most

valuable(2014)

29% Estimated

future

growth rate

in 2015

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• TCO and downtime reduction, and

regulation compliance emerging

as dominant forces influencing

fleet managers’ desirability and

willingness to pay for advanced

truck technologies.

• Fleet managers are anticipating

continuing fuel price volatility and

exacerbating driver shortage. This

is leading fleet managers in

spec’ing technologies that reduce

fuel cost and enhance drivability

and safety of trucks

• Compliance, Safety and

Accountability (CSA) 2010

mandate is not only driving

stability system and collision

mitigation system installations, but

also telematics adoption. This is

further catalyzed by HOS and e-

log regulations.

• In the post EPA-2010 era fleets

are showing interest in

investing in technologies that

despite featuring higher upfront

cost can reduce lifecycle cost

• Price sensitivity analysis

shows rising demand for AMTs,

TPMS, prognostics, synthetic

lubricants, collision mitigation

systems are examples of

technologies being preferred by

fleets to reduce TCO despite

their higher upfront cost.

• Fleet managers of medium-

sized for-hire fleets and large

sized private are most reliant

on advanced truck

technologies and are also

found more willing to invest in

truck technologies that offer

more than a single value

proposition

Recent Preferences

• Among advanced safety

technologies, active chassis

control systems such as ESC,

collision mitigation systems and

RSC are finding increasing

traction among fleet managers.

Among driver information warning

systems tire pressure monitoring

systems and trailer tire inflation

systems, and blind spot detection

and lane departure warning

systems emerging as most

preferred technologies.

• Integrated safety systems

encompassing features such as

stability control and collision

mitigation are expected to

experience considerable

penetration owing to their ability

of delivering multi-dimensional

safety benefits.

Safety Technologies Top-of-mind Issues

Executive Summary

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• Semi- and fully-automatic

transmissions, natural gas

powertrain, and synthetic motor oils

have experienced rising desirability

among surveyed fleet managers

over 2010-2014 period

• Most fleet managers have reported

preference towards a mixed-

sourcing approach for engines

spec’ing both OEM engines and

independent vendor engines for

their new trucks. While preference

for OEM nameplate engines has

increased over 2010-2014 period

brand image of suppliers such as

Cummins and Eaton has ensured

fleet managers’ continued

preference for their products.

• Warranty support and reliability

have topped the list as most

influential factors while choosing

powertrain technologies

• Rise in adoption of prognostics

as a telematics application

underscores its importance

among fleets. Approximately

55% of fleets are willing to

integrate prognostics data with

inventory management and

maintenance systems,

underlining the vitality of the

service and growing adoption.

• Analysis of telematics services

and price sensitivities reveal

that telematics suppliers need

to focus on bundling their

technologies better in order to

cater to the optimal price points

preferred by fleet managers

• Survey results from 2010-2014

show rising preference for this

technology as a tool for

enhancing mobile resource (i.e.

truck and driver) productivity

enhancement

Telematics Technologies

• Based on 2010-2014 surveys and

trends emanating from these

surveys it can be inferred that fleets

will choose technologies and

providers that not only offer

products but also solutions.

• Fleets will continue preferring

powertrain technologies that

provide fuel efficiency benefits, high

degree of reliability and strong

warranty and convenience of

servicing

• Fleets will increasingly demand

safety and telematics technologies

that not only provide intended

benefits but also data for analysis

and training

• Technologies such as AMTs,

collision mitigation systems, stability

control systems, natural gas

powertrain, prognostics will

experience rising spec’ing demand

from fleet managers

Future Preferences Powertrain Technologies

Executive Summary

11

Research Objectives and Methods

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Objectives

The objective of the studies was to continue this research with

an expanded scope and as a year-over-year analysis that

measures and analyzes the current levels and changes in the

familiarity, desirability, and willingness to pay for advanced

truck technologies.

Scope

The scope is to offer strategic understanding of emerging

trends with respect to powertrain, safety and telematics

derived from Frost and Sullivan’s survey of top 100 fleet

managers spanning private and for-hire fleets.

Background Frost & Sullivan’s 2010, 2012 and 2014 customer research studies focused on the top 100 fleet managers, titled “US

Fleet Managers’ Desirability and Willingness to Pay for Advanced Technologies” offer key strategic insights into the voice of the most influential group of commercial truck

buyers in the U.S.

Aims:

• Provide actionable insights

into the purchase decisions of

fleet managers at a time

when the industry is slowly

recovering from recession

• Offer insights by application

for which the truck is used,

thereby directly focusing on

the key demands and

willingness to pay with

respect to new technologies

• Offer insights by technology

area such as powertrain,

safety, telematics, and

regulation compliance

technologies

• Offer year-over-year tracking

analysis where applicable

This study aims to offer strategic analysis of developing trends in US HD fleet managers’ desirability and

willingness to pay for advanced truck technologies based on surveys conducted over 2010-2014 period.


Research Background

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Geographic Coverage: United States

Fleet Managers Focus

• Frost & Sullivan’s voice-of-customer research

targets key decision makers that manage

fleets’ purchasing decisions or influence them.

• The key driver behind surveying fleet

managers was to understand the factors they

use to choose in-vehicle technologies for the

new trucks that they are willing to purchase,

and obtain their opinions.

• Analysis from this survey allows Frost &

Sullivan to deliver time- and mission-critical

information and analysis regarding the success

potential of various advanced technologies,

identify the technologies that have the highest

chance of success, and eliminate the ones that

have the least resonance among surveyed

fleet managers.

Fleet Segment Coverage

1.Class 6 (GVWR 19,501 to 26,000 lbs)

2.Class 7 (GVWR 26,001 to 33,000 lbs)

3.Heavy Duty Class 8 (> GVWR 33,000 lbs)

Duty Cycle:

• On-Highway

• Vocational

Fleet Type:

• Private

• For-Hire


Research Scope and Structure of the Study Fleet Managers of Top-100 U.S. Private and For-Hire Fleets of Class 6-8 Trucks (Primarily Class 8 Truck Fleets) Applied in On-

Highway and Vocational Applications Were Surveyed By Frost & Sullivan in 2010, 2012, and 2014. This study is built on

customer research surveys and corresponding findings focused on familiarity, desirability, and willingness to pay for advanced

truck technologies

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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.


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

2010-2014 us heavy truck fleet managers have spoken

Automotive