A brief summary of key takeaways from Frost & Sullivan's research aimed at engine downsizing strategies of major North American Class 8 truck manufacturers and its impact on the commercial vehicle industry

1. 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. Research Team
Lead Analyst
Contributing Analyst
Ananth Srinivasan
Bharani C. L.
Senior Research Analyst
Automotive & Transportation
Industry Analyst
Automotive & Transportation
(91.44) 6681.4125
(91.44) 6681.4121
ananths@frost.com
bharanil@frost.com
Research Director
Strategic Review Committee Leader
Sandeep Kar
Sarwant Singh
Research Director–Commercial Vehicles
Automotive & Transportation
Partner
Automotive & Transportation
(1) 416.490.7796
(44) 207.915.7843
sandeep.kar@frost.com
sarwant.singh@frost.com
NAAF–18
2

3. 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
NAAF–18
3

4. Executive Summary
NAAF–18
4

5. Powertrain Downsizing—Key Findings
Heavy-duty Engine Market: Key Takeaways in North America, 2012
•
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).
•
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.
1
2
•
•
3
•
•
4
•
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.
NAAF–18
5

6. Powertrain Downsizing—Big 5 Predictions
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
1
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.
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
2
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.
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,
3 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.
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,
4
owing to its recently adopted SCR-based emission reduction strategy. Cummins Inc. is expected to
increase downsizing activities gradually from 2013 until 2018.
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
5
rising proliferation of semi-automatic transmissions are expected to bridge the demand-supply gap for
downsized engines.
Source: Frost & Sullivan analysis.
NAAF–18
6

7. 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
Technology
Description
Level of Industry
Interest
Dependency
Rating
Expected EndUser Benefit
Advanced in-cylinder
improvements
Key OEMs
Cummins, Daimler, Navistar
Volvo, Daimler
Downsizing
Downspeeding
Daimler, Navistar, Paccar,
Volvo
Hybridization
Daimler, Navistar, Paccar,
Volvo
Daimler, Volvo, Navistar,
Cummins
WHR
Turbochargers and
boosting technologies
Daimler, Navistar, Paccar,
Volvo, Cummins
Advanced aftertreatment
Daimler, Navistar, Paccar,
Volvo
Daimler, Volvo
Engine prognostics
LEGEND
NAAF–18
High
Medium-High
Medium
Low
Note:1. All ratings are qualitative.
2. Ratings are a combination of F&S analysis and
market research.
Source: Frost & Sullivan analysis.
7

8. Advanced Powertrain Technologies—Benefit versus Barriers
High
Future Truck Powertrain Will Leverage Multiple Solutions for Fuel Efficiency Enhancement; Downsizing
Emerging as a Key Ingredient of an Integrated Solution
•
Least
preferred zone
4
•
Technology Barriers
6
2
8
3
•
7
•
5
Medium
•
Most preferred
zone
High
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
NAAF–18
Downspeeding is emerging as a major focal point for
OEMs to enhance fuel efficiency, sometimes in
conjunction with and also independent of downsizing.
Convergence of OEM capabilities and enduser preferences
1
Medium Benefit to Industry
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 longterm strategy of all HD OEMs
•
•
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.
Note: Representation is only for indicative purposes.
Mapping is based on primary and secondary research.
Source: Frost & Sullivan analysis.
8

9. 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
Heavy-duty Truck Engine Market: Weighted Average Preference
Ranking of Advanced Powertrain Technologies by Key OEMs,
North America, 2011
In-cylinder improvements
•
7.9
Engine prognostics
Downsizing
7.8
7.5
•
•
Advanced aftertreatment
8.1
8.4
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 aftertreatment technologies,
owing to regulatory
mandates.
Downspeeding
Turbochargers and related
boosting technologies
7.6
7.9
8.2
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.
Waste heat recovery
Source: Frost & Sullivan analysis.
NAAF–18
9

10. 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
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.
In-line 6 cylinder
In-line 6 cylinder
Predominantly VGT
Predominantly VGT
4 to 6 percent increase
Cylinder de-activation being
tested for mid- to long-term
implementation
Electric turbo-compounding
expected by 2018
Configuration
Turbo technology
Transmission
•
•
Brake thermal
efficiency
Predominantly
•
manual
Large proportion of
•
third party
transmission
offering
42 percent
Rising penetration of
AMT
OEM proprietary
transmission as
standard
Increasing market trends
toward optimized
proprietary enginetransmission-axle offering
50 percent or above
SuperTruck program
expected to be a major step
toward BTE improvement
* 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.
Source: Frost & Sullivan analysis.
NAAF–18
10

11. 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
Heavy-duty Truck Engine Market: Diesel Engine Market Overview, North America, 2011
Displacement (in L)
9
10
Torque (in lb. ft.)
Power (in bhp)
11
12
13
14
15
Median range
16
2011
13.7 L–14.1 L
2%–3%
reduction
2018
9
10
11
12
13
14
15
16
300
350
400
450
500
550
600
650
2011
13.4 L–13.7 L
400–520 bhp
4%–6%
increase
2018
300
350
400
450
1100
1250
1400
1550
500
550
600
650
1700
1850
2000
2150
2011
425–540 bhp
1250–1650 lb. ft.
4%–6%
increase
2018
1100
1250
1400
1550
1700
1850
2000
2150
1300–1750 lb. ft.
Source: Frost & Sullivan analysis.
NAAF–18
11

12. 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
Heavy-duty Truck Engine Market: Fleet Vehicle Purchase Intentions, United States, 2012
Trucks in the same
vehicle weight class
with similarly sized
(displacement) engines
Trucks in the same
vehicle weight class
with smaller
displacement engines
20%
Smaller trucks with
smaller displacement
engines
45%
0%
93%
29%
14%
91%
19%
1%
On Highway
3%
0%
86%
Vocational
91%
Percentage of
each choosing
only this
response
20%
40%
60%
80%
100%
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
Note: Data sourced from Frost & Sullivan Customer Research
anticipate buying. (Multiple response)
2012.
NAAF–18
Source: Frost & Sullivan analysis.
12

13. Case Study—Cascadia Evolution
Significant Improvements Without the Need for Downsizing, Indicating Further Improvement Potential If and
When Downsizing is Introduced
System
Engine
Transmission
Axles
Description
Detroit DD15
( 100 lbs. lighter
than previous
DD15 engine)
DT12 AMT
Detroit drive
axles
•
Aerodynamics
•
•
Key Improvements
•
•
•
•
•
•
Cascadia
Evolution shows
the success of
Daimler’s
vertical
integration
strategy
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)
Proprietary transmission based
on second generation AMT in
Daimler E.U. trucks
Two pedal AMT, featuring
pneumatic clutch and shift
actuator
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
Using Evolution
as a base and
downsizing as
a strategy,
Daimler can
further enhance
power density
and fuelefficiency of its
engines
Source: Daimler, Frost & Sullivan analysis
NAAF–18
13

14. Research Scope, Objectives, Background, and
Methodology
NAAF–18
14

15. Research Scope
Base Year
2011
Study Period
2008 to 2018
Forecast Period
2012 to 2018
Vehicle Type
Heavy-duty Commercial Vehicles
Geographical Scope
North AmericaUnited States, Canada
Heavy-duty Truck Engine Market: Partial List of Forecast
Database North America, 2011–2020
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
Source: Frost & Sullivan analysis.
NAAF–18
15

16. Research Aims and Objectives
Aims
To understand and analyze the extent of engine downsizing that will shape engine design in North
American heavy-duty trucks
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..
NAAF–18
16

17. Key Questions This Study Will Answer
Heavy-duty Truck Engine Market: Key Questions This Study Will
Answer, North America, 2011
How does powertrain downsizing fit into fuel efficiency improvement and emissions reduction?
What are the key market and technology trends driving the powertrain downsizing scenario?
What are the downsizing strategies of key heavy-duty OEMs in North America?
How do OEMs compare, and what are the implications of the downsizing strategy adopted?
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?
Source: Frost & Sullivan analysis.
NAAF–18
17

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.
Heavy-duty Truck Engine Market: Partial List of Industry Participants, North America, 2011
OEM: North America
Supplier: North America
Supplier: North America
Paccar Inc.
Cummins Inc.
Johnson Mathey
Navistar Inc.
MAHLE Powertrain
Mack Trucks
Eaton Corp.
Daimler Trucks North America
Allison Transmissions
Volvo Trucks North America
WABCO
Source: Frost & Sullivan analysis.
NAAF–18
18

19. Vehicle Segmentation
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.
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 4, 5, and 6 GVWR
>14000 & <=26000 lbs.
Class 7 and 8
GVWR >26000 lbs.
The scope of the study is the Class 8 heavy-duty truck engine market
Source: US DOT, EPA, Frost & Sullivan analysis.
NAAF–18
19

20. 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
Source: Frost & Sullivan analysis.
NAAF–18
20

21. 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
NAAF–18
21

22. 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
Source: Frost & Sullivan analysis.
NAAF–18
22

23. 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
NAAF–18
23