Truck & Bus Manufacturing
Description
Companies in this industry manufacturing heavy duty trucks including companies that manufacture and assemble heavy duty vehicles and buses. Major companies include International and PACCAR (both based in the US), along with Dongfeng Motor and FAW (both based in China), Mercedes-Benz Group (Germany), Tata Motors (India), and Volvo Cars (Sweden).
The global heavy trucks market size is projected to reach about $300 billion by 2029 at a compound annual growth rate (CAGR) of 5.2%, according to the Business Research Company. Leading countries in the heavy trucks market include Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, the UK, and the US.
The US heavy truck and bus manufacturing industry includes about 80 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $25 billion. This industry does not include makers of light trucks, which are covered in the Automobile Manufacturing industry profile.
COMPETITIVE LANDSCAPE
Heavy truck demand is driven by growth in the agriculture, manufacturing, construction, and retail sectors. Bus demand is driven by growth in the number of school-aged children and investment in public transportation systems. The profitability of individual companies depends on volume and sales of high-margin options. Large companies enjoy economies of scale in purchasing. Small manufacturers can compete by offering highly customized products. The US industry is highly concentrated: the top 20 companies account for more than 95% of revenue.
Companies in the industry compete with makers of transportation equipment such as trains and planes, which also move freight and people over long distances. New trucks and buses face competition from reconditioned and used vehicles, since equipment may have a useful life in excess of 1 million miles.
Mexico and Canada, where many US truck makers have manufacturing facilities, are the leading sources of truck and bus imports. Canada is the industry's primary export market.
PRODUCTS, OPERATIONS & TECHNOLOGY
Trucks and buses can be classified by gross vehicle weight rating (GVWR), which measures the total allowable weight of fully-loaded vehicles. Generally, heavy-duty trucks account for about 50% of the industry's revenue. Buses, including military, account for about 25%. Other products include buses, excluding military and trolley buses, account for about 25%.
Class 8 trucks, or tractors, pull detachable trailers and are equipped with a fifth wheel, the coupling that connects the trailer to the back of the tractor for towing. These rigs are frequently known as 18-wheelers due to the combined number of wheels on the tractor and trailer.
Heavy trucks and buses are typically produced on assembly lines, much like auto manufacturing. Parts are received from outside sources (either third parties or other company-owned plants), usually on a just-in-time basis. Beginning with the assembly of the basic frame of two steel beams with cross-members for support, the product proceeds from station to station where components are added to complete the finished chassis. Axles, a suspension system, an engine, a drive train, and a transmission are part of the completed chassis. Fuel tanks, fans, coupling, and hoses are connected to the chassis. The truck cab, hood, and sleeper compartment are assembled separately and lowered onto the chassis assembly after painting. Final components are attached and the truck is tested using a dynanometer, an instrument that measures engine power while the truck wheels spin on rollers. Additional quality control checks are performed before the truck is driven off the assembly line for a test drive. Some manufacturers provide chassis to other assemblers that outfit the completed rig.
Almost all heavy-duty trucks have diesel engines. However, engines that run on compressed or liquefied natural gas (CNG or LNG) are becoming more popular for large trucks as carriers and their customers look to for ways to reduce carbon emissions. Emission-reduction programs and related incentive funding have also prompted bus manufacturers to develop alternative-fuel vehicles, including all-electric buses. Some truck manufacturers produce their own engines; others buy them from suppliers such as Cummins and Detroit Diesel. Raw materials include steel, aluminum, plastics, glass, and rubber. Metal parts are a combination of forgings, extrusions, and sheet products. Aluminum and plastics lessen vehicle weights and improve fuel consumption.
The global heavy trucks market size is projected to reach about $300 billion by 2029 at a compound annual growth rate (CAGR) of 5.2%, according to the Business Research Company. Leading countries in the heavy trucks market include Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, the UK, and the US.
The US heavy truck and bus manufacturing industry includes about 80 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $25 billion. This industry does not include makers of light trucks, which are covered in the Automobile Manufacturing industry profile.
COMPETITIVE LANDSCAPE
Heavy truck demand is driven by growth in the agriculture, manufacturing, construction, and retail sectors. Bus demand is driven by growth in the number of school-aged children and investment in public transportation systems. The profitability of individual companies depends on volume and sales of high-margin options. Large companies enjoy economies of scale in purchasing. Small manufacturers can compete by offering highly customized products. The US industry is highly concentrated: the top 20 companies account for more than 95% of revenue.
Companies in the industry compete with makers of transportation equipment such as trains and planes, which also move freight and people over long distances. New trucks and buses face competition from reconditioned and used vehicles, since equipment may have a useful life in excess of 1 million miles.
Mexico and Canada, where many US truck makers have manufacturing facilities, are the leading sources of truck and bus imports. Canada is the industry's primary export market.
PRODUCTS, OPERATIONS & TECHNOLOGY
Trucks and buses can be classified by gross vehicle weight rating (GVWR), which measures the total allowable weight of fully-loaded vehicles. Generally, heavy-duty trucks account for about 50% of the industry's revenue. Buses, including military, account for about 25%. Other products include buses, excluding military and trolley buses, account for about 25%.
Class 8 trucks, or tractors, pull detachable trailers and are equipped with a fifth wheel, the coupling that connects the trailer to the back of the tractor for towing. These rigs are frequently known as 18-wheelers due to the combined number of wheels on the tractor and trailer.
Heavy trucks and buses are typically produced on assembly lines, much like auto manufacturing. Parts are received from outside sources (either third parties or other company-owned plants), usually on a just-in-time basis. Beginning with the assembly of the basic frame of two steel beams with cross-members for support, the product proceeds from station to station where components are added to complete the finished chassis. Axles, a suspension system, an engine, a drive train, and a transmission are part of the completed chassis. Fuel tanks, fans, coupling, and hoses are connected to the chassis. The truck cab, hood, and sleeper compartment are assembled separately and lowered onto the chassis assembly after painting. Final components are attached and the truck is tested using a dynanometer, an instrument that measures engine power while the truck wheels spin on rollers. Additional quality control checks are performed before the truck is driven off the assembly line for a test drive. Some manufacturers provide chassis to other assemblers that outfit the completed rig.
Almost all heavy-duty trucks have diesel engines. However, engines that run on compressed or liquefied natural gas (CNG or LNG) are becoming more popular for large trucks as carriers and their customers look to for ways to reduce carbon emissions. Emission-reduction programs and related incentive funding have also prompted bus manufacturers to develop alternative-fuel vehicles, including all-electric buses. Some truck manufacturers produce their own engines; others buy them from suppliers such as Cummins and Detroit Diesel. Raw materials include steel, aluminum, plastics, glass, and rubber. Metal parts are a combination of forgings, extrusions, and sheet products. Aluminum and plastics lessen vehicle weights and improve fuel consumption.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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