More Fleets Using Automatics, Automateds, Despite Much Higher Acquisition Expenses

This story appears in the Oct. 26 print edition of Transport Topics.

Many trucking fleets are continuing to buy automatic and automated manual transmissions during the recession, despite a premium of $4,000 to $8,000 over traditional standard manual transmissions, industry executives and manufacturers have said.

Moreover, they said that advancing technology is likely to increase the use of these newer transmissions even further.

“We have been moving to the automatics in general within our last several purchasing cycles,” said Shelby Green, director of fleet operations for Pepsi Bottling Group Inc.

He said automatics make for a friendlier “environment in many ways because of driver interaction, lower maintenance costs and longer life cycles that balance out the initial cost of an automatic.”

Pepsi Bottling Group operates 2,000 heavy-duty trucks, 75% of which are in local service, and ranks No. 5 on the Transport Topics 100 list of the largest private carriers in the United States and Canada.

Green said that, despite the recession, Pepsi plans to convert all its local delivery trucks to automatic or automated transmissions.

He said drivers enjoy using the transmissions, and “it’s a lot easier to train people.”

Both automatic and automated manual transmissions generally eliminate the need for drivers to use a clutch to change gears, making them easier to operate and, the manufacturers said, making them more fuel efficient because the controlling computer automatically chooses the most efficient time to shift gears. Some automated transmissions still require drivers to use the clutch when starting up from a standstill or to shift the truck to neutral after stopping.

According to a re-cent study by J.D. Power and Associates, automatic and automated transmissions accounted for about 23% of all new heavy-duty trucks sold in the United States in 2006, compared with 10% in 1999.

Since 1999, standard manual transmissions had declined to about 76% from 90% in the earlier tally, Power said.

“Automatic and automated manual transmissions have continued to grow in popularity and have almost doubled the percentage of our build from 2006 to present,” said Landon Sproull, chief engineer for Peterbilt Motors Co. “Automated transmission technology is spreading to a wider customer base as more drivers have experience with them.”

Peterbilt doesn’t build transmissions but offers Allison Transmission automatics or Eaton automateds.

Serge Viola, director for national fleet and ground linehaul for Purolator Courier Ltd., Mississauga, Ontario, said he already has moved nearly all his Class 6 and 7 trucks to fully automatic transmissions and plans to raise the number of automated manuals among his Class 8s to 95%. “Already, 100 of our 110 Class 6 and 7s come with fully automatic transmissions,” Viola told Transport Topics.

For-hire carrier Averitt Express, Cookeville, Tenn., is another fleet that has continued to convert to automated manuals.

“We have been buying automateds in all of our sleepers since 2007 and have 400 to 500 of them now,” Steve Maxon, Averitt’s vice president of equipment, told TT. “We’re buying fewer trucks now in the recession, but the sleepers we do buy come with automated manuals.”

One dealer said he has seen an increase in the sales of automatics and automateds.

“We’ve probably sold double the number of automatics in the past year than we did in the previous one, even though overall sales numbers are down,” said Kyle Treadway, president of Kenworth Sales Co., which has 18 dealerships in six states.

“In part, automatics are growing in popularity because many of our dealerships sell to fleets that operate in remote terrain with low populations,” Treadway said.

Treadway, Purolator’s Viola and a FedEx spokesman said that an automatic or automated transmission can add $4,000 to $8,000 to the price of a new Class 8 truck. However, the move to new transmission technologies is hardly unanimous.

“We’ve looked at automatics in the past, and they are attractive in some respects, but bottom line, they’re still a luxury,” Norman Mitchell, vice president of Cowan Systems Inc., told TT. “It’s a significant upcharge, especially when you combine it with the [Environmental Protection Agency] mandates that forced a big price increase in 2007 and another one coming next year” with the new federal emissions regulations for diesels.

Allison Transmission Inc. is the main manufacturer of fully automatic transmissions, while Eaton Corp. is the dominant manufacturer of automated manuals.

The firms both introduced new models this year, saying it shows their long-term confidence in Class 8 sales. Also, Wabco Vehicle Control Systems, a leading European transmission producer, said that it plans to bring its latest “automated manual” system to North America.

The three main companies that offer automated transmissions are Eaton, Volvo Trucks North America and ArvinMeritor Inc.

Allison, Eaton and Volvo all said their sales, when counted as a proportion of all transmissions spec’d for new trucks, have either held steady or risen during the recession.

Volvo introduced its automated manual transmission, which is only for its own trucks, in 2007.

“Penetration of Allison Transmission in Class 8 straight trucks has increased since 2005 and even during the recession years of 2007 through 2009,” said Lou Gilbert, Allison’s director of North America marketing.

“We saw a step-up in customer orders of our automated manuals that began in the middle of this decade and grew steadily until the recession began,” Staci Kroon, senior vice president of Eaton’s Commercial Vehicle Transmission division, told TT.

“Since then, sales have been relatively flat through the cycle, when you would expect some market dynamic, meaning a downturn because of their added cost,” Kroon said.

In 2007, Volvo Trucks North America began offering its I-Shift automated manual, which its parent company, Volvo AB, first introduced in some markets in 2002. The U.S. version is the “third generation” I-Shift, Volvo said.

“We’ve been extremely pleased with I-Shift’s acceptance by our customers, and its market share is going up steadily, to both vocational customers and on-highway fleets,” Ed Saxman, VTNA drivetrain project manager, told TT.

ArvinMeritor spokesman Mike Pennington said market share of his company’s automated manual is fairly low currently.