MAN prepares for future carbon-based emissions standards

Anders Nielsen took over as CEO of MAN Truck & Bus in September 2012, after 25 years at Scania, like MAN part of the Volkswagen group. There the Swede rose from managing gearbox production to a place on the board responsible for production and logistics.

Despite initial concerns that the Euro-6 emissions standard would mean higher fuel consumption, MAN’s Euro-6 trucks are delivering excellent fuel consumption for operators, outperforming Euro-5 despite the extra exhaust treatment required.

“We have the technology for Euro-6 working perfectly and we are really happy with it,” Nielsen says. “We are seeing really good fuel consumption and we are sure the customer will have confidence in that technology."

And Nielsen believes there is even more efficiency to be squeezed from the diesel engine.

“I do not think we are at the end of the road for the diesel engine,” he says “We will see alternative fuels and alternative drives but for some applications we will see the diesel engine for a number of years to come. We are doing intensive research into all these different options and the question is in exactly which direction will the market go – that is hard to predict.”

Carbon emissions

The market may well be driven to reduce CO2 emissions by the next Euro standard, which will focus on carbon rather than NOx and particulates. Heavy truck manufacturers are concerned that legislators will however follow the car model and place limits of the grams of CO2 emitted per kilometre, ignoring the vehicle’s load carrying capacity.

“CO2 will be the next issue and that is already under discussion in the European Commission,” says Nielsen. “What is important is that you do not do it too simply. The complexity of CVs is much greater than cars. If you start limiting grams per kilometre how do you deal with a construction vehicle? How do you make up the difference between a long haul and a distribution vehicle? The application gives you completely different values.”

Current thinking is to base emissions limits on the Vecto simulation software tool that is being developed by the vehicle manufacturers and the Commission. But Nielsen argues that just focusing on the truck is ignoring the bigger picture.

“To really get a long term improvement in CO2 emissions we need to have a more integrated approach to it, bringing in trailers, traffic congestion, tyres etc,” he says. “We have a responsibility to play our part for sure but if the legislators really want to see improvement in CO2 we have to look at it from a much broader perspective. It doesn’t matter if you achieve 10g CO2 per tonne km if the truck is standing in a traffic queue. So traffic guidance is extremely important.

“There must also be an acceptance that for the competitiveness of Europe we need road transport. You can’t have a dream of putting everything on rail because the capacity is not there. So for us the most important thing for the moment is the acceptance that we need road transport to be sustainable, so we have to be open to everything from longer trailers to how do you make sure that road traffic is efficient.”

Gas power

One way to cut CO2 emissions from heavy trucks is to go to gas or gas/diesel dual fuel engines. To date this technology has largely been the preserve of aftermarket converters but Nielsen says MAN is developing its own Euro-6 gas engines.

“I think we will see a lot of solutions coming from the factories,” he says. “Given the complexity of the vehicles today, to rebuild the vehicle after it leaves the factory is not very easy. You have to guarantee the Euro-6 norms for seven years or 700,000kms. So conversions have to be driven from the OEMs.

Another proposal to improve fuel efficiency is to allow a 50cm extension on the front of the cab to improve aerodynamics. Here again Nielsen says legislators need to avoid being too restrictive in how this could be applied.

“If you say you can add on 50cm of length, how do you use it best?” he asks. “Do you use it for payload? If you are counting grams per tonne kilometre then you gain if you get higher payloads but in some applications you don’t need the length for payload so then it would make sense to use it to improve aerodynamics.

“The problem is always for us as a producer that we have to master the complexity of the complete range of applications. If it comes it has to make the business case for the customer – the savings must mean the customer can pay the higher cost of that vehicle.”

There is growing pressure from the truck OEMs to put the extra length on the back of the vehicle rather than add a nose to the cab.

“I think adding the extra length to the back of the trailer is a much simpler technological solution that could be done faster,” says Nielsen. “The OEMs are saying let’s take that first step because we can do it immediately.”

Reliable for longer

The last recession saw many operators running vehicles for longer, and found that modern vehicles can remain reliable for over a million kilometres. This, combined with the slowdown in the European economies, meant a collapse in new truck sales.

“The truck market depends on two things – replacement need and economic growth,” says Nielsen. “What has been lacking for the last few years is steady economic growth – if Europe comes back into a growth pattern I am sure we will see a much higher CV market.

“It is good that the customer sees that we have very reliable products. I think every year we will improve our products so there is a business case for the customer to change. But uncertainty and lower growth means they will tend to wait. With more aggressive growth in Europe I am sure they will come back to more normal replacement rates so you can’t separate the two questions – they come together. Trucks are capital goods and if you have confidence in the market you will invest. If you are hesitant about which way the market is going then you will try another year with the truck.”

But Nielsen does not believe that the current depressed state of the truck market is the new norm.

“I have been working in CVs for 27 years now and there have been swings in sales volumes every five to seven years,” he says. “I don’t see any reason that should stop. We have seen a longer recession in Europe but on the other hand we saw a big upswing between 2003 and 2008. Then everyone was saying now we have a super business cycle and it will never go down again. We should never have been that optimistic but on the other hand we should not be so pessimistic to say it is low now and it will never come back.”

MAN has recently appointed former VW light commercials MD Simon Elliott as its UK CEO, sparking speculation that MAN could move from a central sales strategy towards the wholesale model preferred by VW for its car and van sales.

“Simon is a really good guy and I am confident he is bringing lots of competence into the company,” says Nielsen. “There is a difference between heavy trucks and light commercial vehicles, including the relationship between the importer and the dealer network. You have to work together to service the customer and find solutions that cover the market. In UK it is a bit easier because it is an island. In Europe it has to work across borders - we have long haulage customers who run from Spain to Moscow and we have to be able service them all the way.

“We can improve our retail business in the UK and it is important for us to give good support to our customers. Exactly how we will organise it I won’t go into but I am convinced there is room for improvement in our retail business.”

China syndrome?

Chinese trucks are improving in quality all the time, and while there is a huge domestic market for them to supply it is not inconceivable they will make an appearance in Europe at some point. Rather than fear a Chinese invasion however MAN is working with one of the biggest truck makers in China, Sinotruck, taking a 25% + 1 stake in the business in 2009.

“There are different applications for different technologies,” says Nielsen. “If you want to have a Euro-6 [Chinese] truck with the same quality and reliability the cost is not so far away from where we are today. I am quite confident that we are competitive where we are with the technology.

“If you go into low cost markets where the customers is not running 150,000km but is perhaps running 30,000km a year they won’t need our quality of vehicle. So there are applications for a lower cost, lower quality truck and here for sure [Chinese trucks] will be competitive. What is good for us is that we see the world market moving towards more professional logistics with more demanding customers who need the type of performance we are providing. That is a big challenge for the Chinese providers. But I always like competition - it keeps you on your toes!”