Press Release: Heavy Duty Manufacturers Association Announces a Successful 2019 Heavy Duty Aftermarket Dialogue

Date: February 13, 2019

The Heavy Duty Manufacturers Association (HDMA), the commercial vehicle division of the Motor & Equipment Manufacturers Association (MEMA), is pleased to announce a successful 7th Annual Heavy Duty Aftermarket Dialogue (HDAD) Conference.  A record attendance of over 400 participants came together to engage in speaker and panelist discussions specifically directed toward the heavy duty aftermarket supplier industry.  “The growth in the HDAD event is evidence of the value that it provides to our markets’ leadership,” said HDMA Chairman Tim Musgrave.
 
The conference featured 27 speakers including fleet executives, economic advisors, technology officers, sales and marketing leaders, and maintenance directors.  The dynamic mix of professionals and experts covered all facets of the heavy duty aftermarket industry, as well as the state of the national and global economies.  “We want to thank all of the panelists and speakers for their contributions, bringing together so many different perspectives for us,” said Musgrave.
 
The Real World View – A Global Perspective
HDAD opened with a panel discussion entitled The Real World View – A Global Perspective and included Ken Davis, founder of Greentree Advisors, LLC, Dean Engelage, president of Great Dane, Roger Nielsen, president & CEO of Daimler Trucks North America, and session leader Chris Patterson.  These original equipment (OE) manufacturers provided insight on the relationship between OEs and the aftermarket regarding the investment of automation, electrification, and traditional powertrains.
 
Telematics was a recurring topic at HDAD.  “Trucks today have 400 sensors on them, 100 million lines of code, and six SIM cards.  It’s like having six cellphones on a vehicle,” said Nielsen.  Use of telematics will increase, and companies will look to leverage that information to have parts available on demand.  “The vision we have is tying all the telematics and sensors into our aftermarket network to – with geofencing – alert the nearest location of the need for a particular part or service opportunity,” said Engelage.  “We want to be able to predict when a failure is going to occur,” added Nielsen. 
 
Regarding electrification, it will have a significant impact on the current supply base.  It will be the people who build mechanical drivetrains and parts versus those who build electric drivetrains only, according to Ken Davis.  The future of electric trucks will be found in specific markets and duty cycles, but only when the costs drop to a level with affordable equipment for fleets without the need for incentives, according to Nielsen.
 
The Global Economic Overview
Bill Strauss, senior economist & economic advisor of the Chicago Federal Reserve, followed with The Global Economic Overview, moderated by Ann Wilson, senior vice president of government affairs for MEMA.  In this session, Strauss said that the U.S. economy’s stability compares favorably to the rest of the world, as no country is “setting the world on fire.”  After a 3% U.S. GDP growth in 2018, Strauss anticipates a continued 2% GDP growth through 2021.  This coordinates with both Blue Chip and the Federal Open Market Committee (FOMC), who have the economy growing at or above trend through 2021.

Aftermarket Industry Economy and Outlook
John Blodgett, vice president, sales & marketing of MacKay & Company, and Dr. Bob Dieli, president & founder of RDBL, Inc. spoke on the Aftermarket Industry Economy and Outlook.  “We’ve seen a lot of changes in the past 10 years, including additions to vehicles, such as emissions, air disc brakes, automated manual transmissions, and safety devices,” said Blodgett.  The truck market is currently one of the hottest on record, with an estimated $4.1 billion aftermarket this year.  This includes a 2.8% compound annual growth rate for the U.S. and a 4.4% compound annual growth rate for Canada, plus 1% and 3.7% growth rates, respectively, for parts pricing.  “We have now moved into what I call the boom phase,” said Dieli.
 
However, in 2019, Dieli has concerns about the investment, export, and import sectors which will be influenced by supply chain issues, tariff and trade matters, and regulations.  Dieli believes these factors could put as much as 50% of Truckable Economic Activity (TEA) at risk.  “For 2019, TEA looks to be challenging, but not necessarily bad,” said Dieli. 
 
Realities of Current and Future Technology on the Aftermarket
The Realities of Current and Future Technology on the Aftermarket panelists expanded on topics that were introduced in the opening panel with regards to technological advances in the heavy duty industry.  Mike Foster, chief technology officer of Allison Transmission, Kent Jones, vice president of global business development & sales for ZF Group, Sandeep Kar, chief strategy officer of Fleet Complete, Jon Morrison, president Americas of WABCO, and session leader Brian Daugherty, chief technology officer of MEMA, made up the panel of subject matter experts.
 
Technology advancements fleets are facing or will face include electrification, connectivity, telematics, cyber security, ADAS, automated driving, OTA software updates, alternative fuels, and e-commerce. 
 
Much of the discussion was focused on safety. “ADAS is great,” said Kar, “but what really protects the vehicle is braking and steering, so service and maintenance of these foundational technologies is important.”  Jones agrees, “The next level for active safety will be to control the truck with electrical steering.  Thirty-two percent of accidents are from trucks leaving the lane.” 
 
Regarding electrification, Kar believes that the truck market will continue to consist of a variety of powertrain options.  Foster concurs, “It is going to be about how long the vehicle is in operation and how long you can have it down to charge.  Fleets will have to ask themselves, ‘Can I still get the same amount of work done regardless of the powertrain?’” 
 
Changing Distribution Model – The Growing and Emerging Players
The next panel, Changing Distribution Model – The Growing and Emerging Players, included Mike Harris, vice president of sales and branch operations for Fleet Pride, Stefan Kurschner, senior vice president of Daimler Trucks North America, Carl Mesker, vice president of sales Americas for SAF-HOLLAND, Walt Sherbourne, vice president of marketing for Dayton Parts, and session leader Lucas Deal, editor of Truck Parts & Service Magazine
 
Discussions in the panel focused on how to remain competitive in the industry.  “Studying other industries and learning how to use their knowledge will help them remain competitive,” said Mesker.  Harris said that product assortment is key for independent distributors to maintain their advantage.  “You have to be close to the customer and add value.” 
 
One hot topic was about Amazon and other e-commerce sites that have recently surfaced.  Kurschner said that, because of the e-commerce business model, everything is being structured around turning around trucks in 24 hours.  However, “Amazon does not have the expertise at the counter,” said Sherbourne.  “The channel that fulfills customers’ needs the best will win, and that changes day to day and market to market.” 
 
Parts and Service: The Fleet Perspective
In the final HDAD panel of the day, Mike Palmer, vice president of fleet services for Estes Express Lines, Gloria Pliler, director of purchasing for Daseke, Lee Quinn, maintenance director of Point Ready Mix, Brett Wacker, vice president of maintenance for Dart Transit Company, and session leader Stu MacKay of MacKay & Company discussed Parts and Service: The Fleet Perspective.
 
Dealing with truck equipment that is increasingly more expensive and complex has fleet executives standardizing parts ordering and maintenance procedures as a result.  “We have paid a price in terms of the complexity of the equipment and the cost of the components,” said Palmer.  Complexity in the equipment has led to the need for continual training to ensure drivers understand the new technology and can operate all the unique trucks in a fleet.  When it comes to parts ordering, Wacker says to look for availability, quality of the part, price, and consistency of delivery. 

On-site surveys concluded that attendees generally rated this year’s HDAD as an excellent event that they would likely recommend to peers.  According to attendees, HDAD is valuable to their businesses, as the speakers and panelists provided honest, real-world perspectives and knowledge about the industry.  The variety of topics ensured that all areas of the business were covered. Several attendees commented that they wished the discussions were longer.


HDAD was held on Monday, Jan. 28, 2019 from 8:00am-4:00pm in the Terry Fator Theater at The Mirage in Las Vegas. The conference was co-presented by HDMA and MacKay & Company and immediately preceded Heavy Duty Aftermarket Week (HDAW) 2019.  HDAD was sponsored by American Diesel Training Centers, Fleet Maintenance, NEXIQ Technologies, and Pricedex Software.
 
The 8th annual HDAD is scheduled to be held during HDAW 2019 at the Gaylord Texan Resort & Convention Center in Grapevine, TX on Monday, Jan. 27, 2020.

ABOUT MACKAY & COMPANY
MacKay & Company is a specialized management consulting and market research firm. With headquarters in suburban Chicago, the company’s focus since 1968 has been, and continues to be, commercial on-highway vehicles, construction equipment, farm field machinery, related components and all elements of heavy duty distribution. 
 
The scope of the practice includes analyses of original equipment and aftermarket potential, strategic options, distribution policies, product introductions, quality management, acquisitions and a range of related subjects.
 
The company has 16 full-time employees and maintains joint venture relationships in England, France, Germany, Brazil and Mexico. The company’s senior management has over 150 years’ experience in the heavy duty arena.
 
For more information, visit www.mackayco.com.
 
ABOUT HDMA
Based in North Carolina, HDMA is the Commercial Vehicle Division of the Motor & Equipment Manufacturers Association (MEMA), a major industry association with a forward looking strategy and a 111 year legacy of advocacy for the motor vehicle supplier industry.
 
A member driven organization, HDMA provides industry leadership for NAFTA based original equipment and aftermarket suppliers in the on and off-highway commercial vehicle equipment industry. This is accomplished through a range of services to its more than 200 member companies, which represent direct employment of nearly 200,000 in their US facilities.
 
For more information, visit www.hdma.org or www.mema.org.

ABOUT MEMA
The Motor & Equipment Manufacturers Association (MEMA) and its four specialized divisions comprise the leading international trade association in the fast-changing mobility industry. Representing vehicle suppliers that manufacture and remanufacture components, technologies, and systems for use in passenger cars and heavy trucks, MEMA serves as a critical bridge between high-tech capabilities in new vehicles –such as autonomous vehicles and vehicle connectivity—and the “nuts and bolts” of vehicle manufacturing. MEMA works at state, Federal, and international levels to ensure that the marketplace and public policy support the development of advanced, transformative technologies that enable safer, smarter, and more efficient vehicles. By directly employing more than 734,000 Americans and generating a total employment impact of 3.6 million jobs, MEMA’s member companies are the largest sector of manufacturing jobs in the U.S. MEMA’s members are represented through four divisions: Automotive Aftermarket Suppliers Association (AASA), Heavy Duty Manufacturers Association (HDMA), Motor & Equipment Remanufacturers Association (MERA) and Original Equipment Suppliers Association (OESA). For more information on how MEMA is leading transformation in the mobility industry, visit www.mema.org

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