Published on February 20, 2014
2012 U.S. Fleet Manager’s Desirability and Willingness to Pay for Advanced Heavy-Duty Truck Technologies Table of Contents & Executive Summary February 2012
Contents Section Slide Numbers Research Objectives, Method Details, and Demographics 4 Executive Summary and Implications 14 Powertrain Technologies 18 Telematics Technologies 42 Advanced Safety Technologies 60 Regulatory Compliance Technologies 90 Maximum Difference Scaling (MaxDiff) 96 Brand Perceptions – Fleet Managers’ Ratings of Truck OEMs, 107 Safety Systems Suppliers, and Telematics Service Providers The Frost & Sullivan Story 119 2
RESEARCH OBJECTIVES, METHOD DETAILS, AND DEMOGRAPHICS 3
Research Objectives The overall objective of this research was to understand Heavy-Duty Fleet Managers in terms of advanced technologies available for their fleets. Specifically, we sought to: – Measure the awareness of the various powertrain, safety, and telematics advanced technologies surveyed. – Assess which powertrain, safety, and telematics advance technologies are currently being utilized. – Determine what features are most important among the various powertrain, safety, and telematics advanced technologies surveyed. – Measure future purchase intentions of the various powertrain, safety, and telematics advanced technologies surveyed. – Determine the impact that pending regulations have on the adoption of various powertrain, safety, and telematics advanced technologies. Source: Frost & Sullivan analysis. 4
Methods Methodology: A dual methodology was utilized to contact a particularly difficult-to-reach target respondent: First, recruitment was conducted via a telephone screening process; secondly, a web-based survey was sent to qualified respondents for their completion. Sample: In total, 100 U.S. Heavy-Duty Fleet Managers were surveyed (from a list of top100 fleets in U.S. from both private and for-hire segments). Specifically, we targeted Heavy-Duty Fleet Managers who: • Are part of the vehicle (for heavy-duty trucks) purchase making process; • Are expecting to purchase additional vehicles for their fleet within the next two years; • Have at least class 6, 7, and 8 vehicles in their fleet. Additional demographic details of the sample are presented in the following slides. Fieldwork: The survey was conducted during October 2011–February 2012. Reporting notes: Due to rounding errors, percentages in charts and tables, may not sum to 100. Source: Frost & Sullivan analysis. 5
Demographics: Truck Detail Type of Fleet Trucks (United States), 2010 and 2012 Class of Trucks (United States), 2010 and 2012 94% 99% Tractor Class 6 to 8 95% 2010 2010 59% 2012 100% Straight 2012 41% Class 1 to 3 53% 36% 4% Other 36% Class 4 to 5 12% Base: All 2010 respondents (n=101), all 2012 respondents (n=100). 32% Base: All 2010 respondents (n=101), all 2012 respondents (n=100). S6. What types of trucks does your fleet currently utilize? (Multiple response) S5. Which of the following classes of vehicles do you currently have in use in your entire fleet? (Multiple response) Source: Frost & Sullivan analysis. 6
Demographics: Types of Trailers Types of Trailers (United States), 2010 and 2012 57% Dry vans 74% 47% Flatbeds 2010 42% 32% Tankers 32% 2012 28% Specialty trailers 25% 23% Utility trailers Other 25% 16% 35% Base: All 2010 respondents (n=101), all 2012 respondents (n=100). S6A. What types of trailers does your fleet currently utilize? (Multiple response) Source: Frost & Sullivan analysis. 7
Demographics: Types of Fleets Represented Types of Fleet (Private/Hired) (United States), 2010 and 2012 Type of Fleet (United States), 2010 and 2012 46% 61% For hire 62% On highway 86% 2010 2012 47% Private 2010 2012 32% 39% 7% Government/public fleet Vocational 14% 6% Base: All 2010 respondents (n=101), all 2012 respondents (n=100). S9. Is your fleet primarily S10. Is your fleet primarily? Base: All 2010 respondents (n=101), all 2012 respondents (n=100). Source: Frost & Sullivan analysis. 8
Demographics: Respondent Titles and Years in Current Role Title of Respondents (United States), 2010 and 2012 Time in Current Role (United States), 2010 and 2012 69% 2010 Fleet manager 56% 2012 25% Less than 2 years 2010 2012 33% 11% 14% 3-5 years 13% Maintenance/service manager 27% 16% 6-10 years 16% 4% CEO/COO/President/Owner 9% 11-15 years 7% 14% 2% Safety manager 4% 16-20 years 0% Other 4% Base: All 2010 respondents (n=101), all 2012 respondents (n=100). S1. Which of the following best describes your current title? D3. Approximately how long have you been a (RESTORE S1 RESPONSE)? More than 20 years 12% 16% 18% 30% Base: All 2010 respondents (n=101), all 2012 respondents (n=100). Source: Frost & Sullivan analysis. 9
Demographics: Scope of Responsibility Scope of Influence on Fleet Purchase (United States), 2010 and 2012 Degree of Involvement in Fleet (United States), 2010 and 2012 77% 67% Recommend/Influence purchase One of 2 or 3 fleet purchase decision makers 89% 2010 77% 2010 2012 55% 2012 Specify fleet equipment 79% 19% One of many fleet purchase decision makers 16% 60% Purchase fleet vehicles 58% 14% 2% Other 3% Base: All 2010 respondents (n=101), all 2012 respondents (n=100). Sole decision maker 7% Base: All 2010 respondents (n=101), all 2012 respondents (n=100). S2. What is your role in the purchase decision process of vehicles for use in your fleet? Specifically, for which of the following are you responsible? (Multiple response) Source: Frost & Sullivan analysis. S3. How involved are you in the purchase decision process of vehicles for use in your fleet? 10
Demographics: Timeframe of Future Vehicle Purchase Intentions Timeframe of Future Vehicle Purchase Intentions (United States), 2010 and 2012 55% Within the Next 6 Months 63% 2010 32% 2012 Next 6 to 12 Months 28% 13% Next 1 to 2 Years 9% Base: All 2010 respondents (n=101), all 2012 respondents (n=100). S4. When do you expect to purchase additional vehicles or replace existing vehicles in your fleet? Source: Frost & Sullivan analysis. 11
EXECUTIVE SUMMARY AND IMPLICATIONS 12
Executive Summary • The 2012 HD fleet managers survey reveals decisive change in preference for technologies that reduce total cost of ownership of truck. As fleets are tending to keep trucks for longer periods of time, technologies that reduce lifecycle cost are being increasingly preferred by truck fleets. The choice of prognostics as the most preferred technology in an advanced technology bundle offered by truck OEMs underlines this trend. • The high ratings obtained by technologies such as SCR, advanced engine oils and semi/full automatic transmissions reveal that fleet managers are looking at technologies that deliver more than one major value proposition. All three technologies have experienced improvements in their contribution to fuel efficiency enhancement, but also offer lifecycle/operating cost reduction potential. • Fleet managers are anticipating rising fuel price volatility and exacerbating driver shortage issue. Fleet managers are also operating under severe financial stress and running on lower levels of human capital. Fleets managers are therefore showing preference for technologies that deliver time and mission critical information, data and analysis for facilitating decision making. • CSA 2010 and braking distance regulation is forcing fleet managers to invest in technologies that not only induce safe driving practices but also technologies which can be used to actively intervene to enhance truck safety. Fleets are also opting for technologies that can be used to reduce maintenance and service costs, train drivers and technicians, and reduce fuel related costs. • Price sensitivity analysis reveals results that show that fleets are willing to invest in an advanced technology, despite its higher price premium, if they are convinced that the technology can help reduce operating cost, induce safe driving practices, and maximize vehicle uptime. • Data and information (both real-time and recorded) associated with various truck technologies can be leveraged in creating training, prognostics, and other types of revenue streams for OEMs and suppliers. Fleet managers are showing increasing hunger for effective utilization of information related to their mobile resources: drivers and vehicles. Source: Frost & Sullivan analysis. 13
Implications • Advanced technology development and marketing must center around reducing operating expenses of fleet managers are facing challenges such as fuel price volatility, a strengthening regulatory environment, and shortage of skilled drivers and technicians. • The higher degree of cognizance for several advanced soft technologies, especially in the safety and telematics space, implies that OEMs and suppliers must work closely with telematics service providers, information and communication service providers, data analytics providers, infrastructure planners, and government arms. • Consistent with the 2010 study, managers of the largest private and for-hire heavy-duty fleets in U.S. are willing to pay higher price premiums for advanced technologies if they see potential in the technologies in reducing operating expenses. This implies, fleet operating expense and lifecycle cost reduction must be key focal points for R&D teams in developing new commercial vehicle industry focused technologies. Marketing teams should underline these value propositions to fleet managers to effectively market and sell these technologies. • The proliferation of connectivity-enabled technologies, especially technologies such as prognostics which impacts all adjacent powertrain, chassis, safety, and other technologies, implies tremendous revenue growth opportunities for OEMs, suppliers, aftermarket service providers, and fleets alike. The rising interest in this technology implies that mobile resource connectivity for vehicle operations, service, and maintenance will drive growth opportunities for a wide spectrum of market participant groups. • The highest ranking technologies in terms of perceived value and interest are offering OEMs affirmation of their vertical integration strategies and offering suppliers ideas to focus on developing virtual integration relationships with OEMs by investing in some of these technologies and developing strong expertise in developing and marketing the technologies. Source: Frost & Sullivan analysis. 14
Executive Summary: CEO Perspective 1 Fleet managers are showing high degree of interest in technologies that can help reduce operating expenses and total cost of ownership 2 Fuel price volatility, driver shortage, regulation compliance, downtime reduction, and data analytics are driving preferences 3 Telematics is emerging as a key enabler of several benefits and applications desired by fleet managers 4 With fleets keeping trucks for longer periods of time, technologies that improve uptime and reduce lifecycle costs are welcome 5 Creating electronic interfaces for truck systems/components for integration with vehicle’s communication infrastructure is seen as a key strategy imperative Source: Frost & Sullivan analysis. 15
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