In a provocative and stimulating AutomotiveWorld.com webinar entitled ‘Transmission automation trends in the global commercial vehicles industry’, leading experts on truck transmissions from Eaton, WABCO and Frost & Sullivan debated the likely future of automation in truck transmissions in global markets. Out of this emerged a fundamental theme: greater uptake of alternatives to manual transmission seems inevitable, but what was less clear was whether markets around the world would converge on a single technology choice.
The first feature to emerge from their presentations was how enduring differences have been for the major regional markets. In North America pervasive low fuel prices have been crucial in allowing traditional, but relatively fuel inefficient automatic transmissions to gain a significant share. In Europe the emphasis on fuel economy alongside the requirements of cab-over designs has resulted in automated manual transmissions (AMTs) being much more prevalent than elsewhere. Given the growing concern over fuel economy in the USA, it is reasonable to expect growing adoption of AMTs within that market, though precisely which technological package is going to dominate is less clear.
The big question, however, is what is going to happen in the emerging markets. It is in these markets that the major growth opportunities are for commercial vehicles, but it is also in these markets that there is the greatest uncertainty over future transmission choices.
Given the growing concern over fuel economy in the USA, it is reasonable to expect growing adoption of AMTs within that market
On the one hand, fuel costs are a high proportion of total operating costs compared with Europe and North America once purchasing power parity is taken into account. On the other hand, relative scarcity of capital means that truck buyers are concerned about initial purchase price rather than lifetime operating costs.
Moreover, low labour costs also mean that drivers tend to be unskilled and of lower status than those in the more mature markets. Hence it is entirely possible that poor driving technique can easily undermine the theoretical fuel economy advantage of a traditional manual transmission, and increase damage to the transmission.
The currently fragmented structure of global markets as far as commercial vehicle transmissions are concerned is bound to contribute to higher prices and hence lower volumes. Convergence is by no means a given, simply because operational conditions are so variable across the world, but there are profound economic and environmental pressures on truck OEMs to deliver improved fuel economy. Hence, the long-term prognosis (and by this is meant in the region of 10-15 years into the future) is for convergence in transmission choices.
The currently fragmented structure of global markets as far as commercial vehicle transmissions are concerned is bound to contribute to higher prices and hence lower volumes
If technology convergence does occur, possibly stimulated by increased use of hybrid powertrain systems, then doubtless prices will fall and the uptake of AMTs in particular will increase dramatically. At the same time, however, convergence in technology will also result in consolidation in the sector – particularly for the leading independent producers.
The established market leaders will rely upon system integration skills and continued advancements in their technological expertise to withstand lower cost producers in emerging markets. It is an expensive strategy, but one for which there is no real alternative. The next few years will therefore be crucial for the long-term structure of the truck transmission sector, including of course the major OEMs.
Click here to view the webinar on demand.
Dr Peter Wells is a Reader at Cardiff Business School, where he is a Co-Director of the Centre for Automotive Industry Research and leads the automotive industry research programme within BRASS, also in Cardiff University. Dr Wells is also a director of AutomotiveWorld.com’s sister website AWPresenter.com. He can be contacted on wellspe@cardiff.ac.uk.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
