125 years of trucks: Daimler is facing a radical change

Spin-off from the entire group, IPO and then take off with alternative drives – they set themselves big goals at the truck manufacturer Daimler Truck. Exactly 125 years after the start of the truck business, however, the upheaval harbors some risks.

As Gottlieb Daimler presented the first motorized truck in the world 125 years ago, this novelty first had to assert itself on the market – compared to horse transport wagons common at the time. The upheaval was tough and lasted for many years.

A Daimler is a “good animal”

It has been handed down that in the beginning Daimler put its still largely unknown trucks in a row with draft animals at a trade fair and advertised them with a flyer. A Daimler is a “good animal”, wrote the mobility pioneer there in the spelling that was valid at the time. He pointedly wrote: “Pull like an ox, you can see it here; He doesn’t eat anything when he’s in the stable; and only drinks when work goes on.”

According to the company, Daimler presented its first on August 18, 1896 Trucks – and wanted to quickly publicize the converted freight wagons equipped with a two-cylinder engine. The primary aim of the leaflet: to mentally pick up farmers as well as the owners of breweries and grain mills, who at that time usually had to transport heavy loads from A to B, and to convince them of the meaning of the reinvention.

Daimler: The first truck from 1896 (Source: Daimler AG / dpa)

This situation is somewhat reminiscent of the current situation of the Daimler Truck company, which has since emerged from the first truck tests by the Daimler-Motoren-Gesellschaft at the time.

Truck traffic is to be revolutionized

Again a kind of turn of the epoch is imminent, again the point is that truck traffic on the road is to be revolutionized to some extent. Daimler and many competitors are working to ensure that trucks with alternative drives will establish themselves in the market. Conventional combustion engines should disappear in the future – not least because of political requirements and for reasons of climate protection.

“Just as the invention of the truck itself was a radical change back then, we are now reinventing the truck,” says Andreas Gorbach, Chief Technology Officer at Daimler Truck. But as at the end of the 19th century, it is becoming apparent that the whole thing is likely to be a lengthy and tough affair.

In order to survive in the competition between the major players in the industry, the truck division of Daimler AG is repositioning itself in these months. Not only that billions of dollars are invested in the development of electric and hydrogen fuel cell drives – on top of that, the previous truck subsidiary is to be spun off from the Daimler Group and then separately listed on the stock exchange. On October 1st, almost exactly one and a half months after the 125th anniversary of the presentation of the first truck, these plans are to be approved by the shareholders at an extraordinary general meeting.

Separation of truck and car business

The bottom line is that there will then be two independent corporations: on the one hand Daimler Truck for the truck and bus business, on the other hand Mercedes-Benz for the auto and van business. Even if it is the end of the lived tradition of a mixed goods store under a Daimler umbrella company, the move on the market is rated positively. “The separation will give Daimler Truck the opportunity to consistently align its business to the requirements of the truck industry and its user groups,” says mobility expert Joachim Deinlein from the consulting firm Oliver Wyman.

Independently, Daimler Truck has the chance to enter into partnerships with other companies more easily and also to subject the sales and service presence more consistently to a “truck logic”.

In fact, the truck division has so far been viewed by the public mostly as an appendage to the passenger car business at Daimler. Ultimately, the end user is more focused on the topic of cars, and the differences are also huge in terms of numbers: the car and van sector contributed 55 billion euros to total sales in the first half of the year, while the truck and bus sector contributed just 18.7 billion euros.

As in 1896, Daimler is facing a radical change

Mercedes-Benz eActros: Series production is scheduled to start in October.  (Source: dpa / Daimler AG)Mercedes-Benz eActros: Series production is scheduled to start in October. (Source: Daimler AG / dpa)

Up until now, Daimler Truck has been “more in the slipstream of the passenger car sector,” says Gorbach, Chief Technology Officer. That will change. “We can make our business model and our value more transparent in the future – for investors, but also for customers and the public, maybe even for our own employees.”

Only industry experts know that Daimler Truck is the world market leader in heavy commercial vehicles: The Swabians are particularly well represented in the important North American market with the Freightliner brand. Whether the company can defend this position will also depend on the success of the strategy with alternative drives. Here, the Stuttgart based on classic electric and hydrogen fuel cell trucks. Some of the competition is also experimenting with vehicles that are elaborately supplied with electricity on the road via overhead lines.

Daimler’s main target market for alternatively powered trucks is initially Europe. Series production of the Mercedes eActros – the first electrically powered 25-tonne truck for heavy-duty distribution transport – is due to start in October. For trucks powered by hydrogen and fuel cells, the aim is to start series production of the first models by 2027. These 40-ton trucks should then have ranges of up to 1,000 kilometers without a refueling stop.

When the bottom line is that money can be made with this remains an important question. In the truck business, corporate customers are even more concerned with simple cost comparisons than in the privately dominated car business, and the diesel truck is the leader in this area. “We have to get to the point where it is economically worthwhile for the customer to switch to a CO2-neutral truck,” says Gorbach. In other words: The majority of customers will probably only switch when it pays off for them. Just as it was the case 125 years ago.

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