Inside the global axle and suspension market

From the July 2017 issue.

After investing heavily in R&D over the past half decade, the axle and suspension community is all set to jump on the digitisation bandwagon. Is it one step ahead of itself, though?

It’s unlikely Socrates had axle and suspension design in mind when he stated that the only true wisdom is in knowing you know nothing* – and yet he perfectly summarised the sector’s collective state of mind in 2017 AD, according to some of the most prominent names in the industry.

“Business confidence in the axle and suspension space hasn’t been as inconsistent as it is now in a long time,” says Markus Gehle, Managing Director at German axle and suspension specialist, Gigant. “It’s hard to make sense of it all from a supplier’s perspective – all we know is that we don’t know much at all.”

After the UK’s fateful Brexit vote, Gehle says the spectre of a new Eurozone crisis swept through the transport equipment industry like a chill wind, prompting many in the field to bring down their outlook significantly for the 2016-17 period. “Brexit, Putin, Trump – so much happened in 2016 that I’m not surprised everyone took the foot off the pedal a little during Q3 and Q4,” he says. “Only half a year ago it still felt like the trailer industry was about to go into VF (ventricular fibrillation, ed.), and now everyone is strangely relaxed again – what do you make of that?”

Martin van Willigen, Sales Director at Dutch company, Valx, which is part of the global Fuwa Group, made the same observation since Germany’s IAA Commercial Vehicle Show came to a conclusion last autumn. “Assessing the market is definitely not as straightforward anymore as it once was,” he says – indicating that the industry might be one step ahead of the market with view to next-generation technology.

“The last IAA certainly managed to set the scene for the interconnected future we’ve all been talking about – there was some real excitement about digitisation and the like – but that doesn’t mean we’re there yet. I think there’s a bit of confusion in the marketplace between where we’re headed long-term and how to go about business in the here and now.”

According to van Willigen, the tension between the ambitious future vision many in the industry painted leading up to the IAA Show and the harsh reality of everyday business that set in afterwards – amplified by the unexpected outcome of the US election – may in fact be key to understanding the notion of uncertainty he has been observing. “Regardless of the industry, when the perceived distance between vision and reality is getting too big, we’re starting to focus more on the basics again, that’s only natural.

“I think that’s always the case when you reach that famous glass ceiling but haven’t quite broken through it. Do you focus on the big ideas that are not necessarily commercially viable or do you work with what you have? As an industry, we’re going back and forth between the two poles, and that’s probably where some of the confusion stems from.”

Hinting at an energy-recuperating axle concept Valx presented as early as 2012, he says the reciprocity between aspiration and reality is especially prevalent in the axle and suspension space. “We’re all caught in between. There’s a lot we could do – and we continue to develop the capacity to make it all happen behind the scenes – but we also need to work in the now,” he says, unknowingly paraphrasing billionaire businessman Mark Cuban, who once told Esquire magazine that “there’s way too much hype on the technologies and not enough attention to the real businesses behind them”.

Detlef Borghardt, CEO of global component specialist, SAF-Holland, is equally pragmatic in his assessment of the state of the industry, saying there is no one discernable trend shaping the entire segment at the moment. But he is also adamant that now is not the time to stop innovating. “You need to assess the market by region and application, as there is no one-size-fits-all prediction anymore,” he says. “We may be going through a more outcome-focused phase again where weight, delivery time and price do the decision-making, but we could quickly turn our attention to high technology again. It’s a terribly confusing, but equally exciting time.”

In line with that, Borghardt says trends like connectivity and digitisation may seem to fall victim to more pressing issues from time to time – at least from the outside – but won’t go away any time soon. “I like to think the tension between R&D and sales has always existed – there’s just so much happening at the moment that it’s much more visible than before. Data science, material science, telecommunication – progress is unstoppable right now, and the transport industry is right in the middle of it.
“However, what’s important to note is that it’s not an either-or-scenario. As an industry, we’re always thinking about tomorrow, but we’re also always operating in the now. What’s changing is only the market’s focal point, so we need to be prepared for anything.”

BPW Executive Board Member and Head of Sales, Carlo Lazzarini, also senses a heightened level of uncertainty in the transport community, but is more optimistic about the market’s ability to catch up with the industry’s ambitious tech agenda. “The first quarter of 2017 was strong enough to indicate additional growth for the rest of the year, but at the same time, uncertainty has increased due to major elections taking place in France and in Germany this year as well as the political unrest in Turkey – a reliable forecast beyond 2017 therefore remains difficult,” he summarises. “While there has been no significant change in OEM purchasing behaviour yet – quality and delivery still rank first and second whilst price comes third – there is an increasing trend towards digitisation in the industry in Europe and in Asia, where more and more OEMs explore the topic in order to better serve the fleet operators in reducing their Total Cost of Ownership, thus increasing asset profitability.”

With BPW having showcased a fully functional electric drive axle for distribution vehicles at the last IAA Show, he says the company will be at the ready as soon as the market opens up to the notion of digitisation and electric mobility. “In the area of commercial vehicles, a number of aspects point to a promising future for electric drives,” he says. “The only thing we don’t know is when exactly the whole trend will really take off.”

Up until that point, the industry is likely to remain in a position where it has to wait for the market to catch up with technology, as Markus Gehle emphasises. “As an industry, we may have been one step ahead of ourselves going into the IAA Show. We are navigating a market that’s both highly volatile and inherently conservative, while planning for an interconnected future some of us can’t even imagine yet. It’s a lot to handle.”

While there are still some issues to overcome, mostly regarding the standardisation of key componentry and pricing, Gehle says the revolution is bound to come eventually, and that testing the limits of innovation will ultimately prove to have been the right choice. “It’s a question of when it will happen, not if.

“But until we figure out exactly which direction the market will take, everyday business is just as important as dreaming about the future. Unfortunately, both are equally complex.” 

*The famous saying is derived from Plato’s account of Socrates, but it’s not proven the Greek philosopher himself ever said it.

What’s next FOR… BPW?

After a strong 2016, Carlo Lazzarini, Member of the Executive Board at Germany’s BPW Group, is confident the rest of the year will “remain strong” and see further year-over-year growth. According to Lazzarini, China comes top of the list with regard to a geographical breakdown, followed by Europe. Only the UK and Turkey are “relatively depressed” at the moment, he says. Especially the political situation in Turkey concerns him, but “at this point in time, we remain bullish for the year ahead”. One development backing up his optimism is that more and more transport business focus on Total Cost of Ownership (TCO) as a key parameter of the procurement process. “This paves the way for more ‘intelligent’ components on a trailer,” he explains. “The BPW Group, for example, offers tyre pressure monitoring systems or brake pad monitoring systems that contribute to the safety and availability of the vehicle and provide for fuel savings. The data generated from these intelligent components can be transmitted via telematics to the driver, dispatcher or workshop in order to streamline transport, loading and repair processes.” The industry’s ongoing focus on lightweight construction will also drive innovation in the years to come, he adds. “We constantly strive to reduce the weight and increase the reliability of our products. Our ECO Vision running gear, which is made of fibre-reinforced composite, is just one example and will enable us to achieve a weight reduction of about 80kg per air suspension module in the future.” Lazzarini says BPW is already testing a pre-production sample of the new running gear range on the road, but a release date has not been confirmed yet. The same is true for the company’s eTransport product, a new electric drive axle package comprising the axle itself, an electric drive and an energy accumulator that can be integrated in a wide variety of vehicle models. While it is unknown if and when the product will go mainstream, Lazzarini says the trend towards digitisation could change traditional buying patterns and make future technologies more viable.

 

What’s next FOR… FUWA?

Despite a challenging political framework, the Fuwa Group – a global axle and suspension conglomerate comprised of innovative Australian equipment specialist Fuwa K-Hitch, US axle expert AXN, up-and-coming Dutch brand Valx as well as Chinese manufacturing giant Fuwa – is extremely buoyant about the year ahead.  “As a global entity, we are in prime position to balance demand and build on our reputation for being especially agile and connected to local market demands,” says Rocco Aloisio, General Manager at Fuwa K Hitch, adding that Fuwa has built an international network in the transport equipment scene that gives it both an innovation and a capacity advantage.  Every brand has a unique strength and intimate local market knowledge, which makes the group an incredibly well resourced global entity ready to deal with specific regional market movement,” he explains. “In the Australian market, for example, the topic of Performance Based Standards (PBS) will continue to gain momentum as fleet operators seek to take advantage of substantial productivity gains through the innovative trailer designs under the PBS guidelines.” In line with Martin van Willigen’s comment on economic feasibility (see main copy), AXN’s Craig Smith says Total Cost of Ownership (TCO) will likely dominate the discussion in 2017 in the US. “TCO is a real buzzword in the market at the moment. Operators are focused on having a competitive edge and a point of difference between them and their competitors, while also focusing on the bottom line,” he explains.  “As such, our expectation is that we will see a considerable increase in demand for axles that are readily prepared for tyre inflation technology – they can directly add to a fleet’s bottom line, be it by reducing fuel use and tread wear or increasing uptime.” Weight reduction will continue to be an important topic, too, says Smith, especially in the US container chassis market, which is reportedly showing signs of picking up again on the back of a very subdued market in 2016. He says construction trailers also seem to be holding strong in the US – a trend that is also visible in other global markets.


What’s next FOR… SAF-Holland?

“Unfortunately there is no one distinct trend shaping the transport equipment market in 2017,” says Detlef Borghardt, CEO of SAF-Holland. “You need to assess the market by region and application, there is no one-size-fits-all prediction. That being said, electrification is one trend that might transcend market segments and regions alike. The question is, when does it become mainstream.” In North America, Steffen Schewerda, President Americas at SAF-Holland, is expecting trailer demand to go down somewhere between six and nine per cent, but refuses to believe the election of President Donald Trump played a significant role in the development. “We’re seeing a cyclical slowdown that’s largely expected and will continue into 2018,” he says. “As such, most suppliers seem well prepared for it.” According to Schewerda, the key challenge will be to balance out the loss by saving costs and offering products that provide added value for existing customers and attract new business at the same time – for example by providing weight savings. “In the US, we’ve just launched the new CBX40 AeroBeam product for on-highway van and reefer applications and the CBX23 AeroBeam for tank and flatbed work,” he explains. “We can now proudly say that SAF-Holland offers the lightest air suspensions in the North American market. When equipped with our P89 disc brake axles, we can combine those weight savings with a measurable safety advantage, which we hope will give us the edge we need and plays into the cards of larger fleets, which are increasingly embracing disc brake technology.”  The same is true in China, says Borghardt, where new legislation is expected to change the focus from price to weight. “There will be a lot of movement in that market,” he says. “China has huge potential and is maturing rapidly. We have high hopes for both air suspensions and disc brakes here.” In Europe, Borghardt says weight savings are equally high on the agenda, but connectivity and digitisation are likely to dominate much of the discussion in the long-term. “Data science, material science, telecommunication – progress is unstoppable right now, and the transport industry is right in the middle of it.”


What’s next FOR… Gigant?

“Business confidence in the axle and suspension space hasn’t been as inconsistent as it is now in a long time,” says Markus Gehle, Managing Director at German axle and suspension specialist, Gigant. “Only half a year ago it still felt like the trailer industry was about to go into VF (ventricular fibrillation, ed.), and now everyone is seemingly relaxed again – what do you make of that?” One reason for the confusion, Gehle suggests, could be that Russia, Turkey and the US all seem to lack political stability at the moment, with the UK and Europe also showing sporadic signs of volatility. “It’s a global economy, so political unsteadiness can affect anyone in the blink of an eye,” he says. “With Trump, Putin and Erdogan, as well as a Brexit, there’s pressure from virtually every angle.” But Gehle says it’s not all gloom and doom in the transport equipment world: England and the BeNeLux region perform solidly, he explains, and southern Europe is also catching up. On home soil, the company has gone from strength to strength, too – especially since Krone took over in 2013 and asked the family business to develop and produce a Krone-branded axle and suspension system. “It’s an interesting scenario – we’re doing well as an industry, but sometimes I think we’re still looking at the market like a rabbit watching a snake.” Instead of sitting out the situation, Gehle says Gigant has chosen a more proactive approach and invested in a new, fully automated production line catering to growing demand for the Krone axle. “We’ve added some serious production capacity to ensure we can keep up with demand. It’s a true Industry 4.0 solution where all parts are moved around autonomously and all parameters are computer-controlled.” On the innovation front, Gehle says, digitisation is arguably the most tangible trend, indicating that Gigant’s ‘digital axle’ solution, first teased at the 2016 IAA Commercial Vehicle Show, might soon become a reality. “A lot is doable, but we need to see what’s viable, too. Sensor technology might be one such thing.”

 

What’s next FOR… JOST?

JOST used last year’s IAA Commercial Vehicle Show in Germany to align the recently acquired Mercedes-Benz TrailerAxleSystems business with the long-standing JOST brand, a move that will continue in 2017. Spare parts, for example, are no longer exclusively available via the Mercedes-Benz network, with JOST now also selling all spare parts for new pre-2015 Mercedes-Benz axles through its own global and spare parts sales network.  “Since executing the acquisition of Mercedes-Benz TrailerAxleSystems, JOST has become a highly proactive player in terms of industry consolidation”, states Lars Brorsen, CEO of the JOST Group. “The new product range further complements our portfolio and perfectly aligns with our focus on quality and engineering expertise. The acquisition strengthened JOST as a full range supplier to the truck and trailer market and gives us an opportunity to add a new dimension to our customer relations.” The company’s core axle line is branded DCA for Durable Compact Axle, explains Charlotte Hermes, Product Manager JOST Axle Systems, and now comes with the well-known JOST logo and a small “engineered by Mercedes-Benz” by-line.  According to Hermes, the key to the DCA range lies in the modular design philosophy behind it, providing “almost unlimited” flexibility from just a small number of components. “For the customer, this means fewer spare parts and, thanks to unsurpassed quality, lower lifecycle costs.” With weight reduction becoming ever more important, Hermes says the latest DCA incarnation is the ‘Weight Optimiser 27’, featuring a unique air bellow support made from aluminium that saves fleets an additional 27kg per three-axle unit.  Going forward, CEO Lars Brorsen says, “investments definitely have to be dedicated to efficiency gains and flexibility rather than capacity. JOST, for example, will not only continue to integrate the acquired trailer axle systems, but massively improve efficiency as well. This is what we attach our post-signing investments to efficiency, not capacity.”

 

What’s next FOR… VDL Weweler?

A mechanical engineer by trade, Dick Aalderink, Managing Director of Dutch company VDL Weweler, has a talent for detecting meaningful patterns among seemingly random data – and yet he doesn’t quite know how to make sense of the axle and suspension market at the moment. “It just doesn’t make sense,” he says. “We’ve reached out to the market in December as a forecasting exercise, and all signs pointed to a slight slowdown. Business sentiment was quite subdued at the time. Today, the mood is very much the same, so you would expect the market to follow suit. But that’s not the case. When I look at the European market today, it’s as healthy as it’s ever been. But the market doesn’t seem to take note – business confidence is still mediocre at best. Look at Donald Trump and Brexit. People are too worried about the potential of a political meltdown to truly embrace the positive signs we’re getting from the market. It’s a bizarre scenario. Everyone is puzzled.” What could also play into the situation, Aalderink adds, is that that the balance of power in the axle and suspension market has shifted since both Schmitz Cargobull and Krone started offering self-branded running gear, with Kögel also working on a captive solution. “The dynamics in the market have changed,” he explains. “Over time, OE volume has gone back for some axle builders, so they’re now focusing on other market segments and product categories,” he says. “The goalpost is moving.” For VDL Weweler, which specialises in the design and manufacture of high-tech suspension systems designed around a 3D-forged trailing arm, that development is no cause for alarm, though, Aalderink explains. “We have a highly flexible solution that can bring measurable benefits to both OE and aftermarket applications, regardless of the axle, so we’re still very much in the game.” In fact, VDL Weweler could be on the brink of a small suspension revolution, he adds, pointing to the company’s new air damping solution developed in collaboration with Firestone. The shock-absorber-free system was first presented at the 2016 IAA Commercial Vehicle Show and is now under trial in South Africa. “We’re currently testing the product under the toughest conditions to ensure it is absolutely bulletproof,” he says. “Once ready for serial production, the system could revolutionise the suspension market and allow us to include even more functionality in the trailing arm – making for less parts, virtually zero loss in damping ability over the life of the system and greatly reduced tyre and road wear.”

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