Michał Pakulniewicz, Trans.info: The Polish Automotive Industry Association (PZPM) has recently published the preliminary results of the registration of commercial vehicles for March and the entire first quarter of this year. In the heaviest category of trucks, there was a drop of as much as 16%. Every year. What were your first three months of this year like?
Mariusz Piszczek, managing director of DAF Trucks: Well, without beating around the bush, I must admit that it was not a good time for us. First of all, our dealers struggled with the issue of vehicles that were left for sale from last year’s purchases. We also finished the first quarter with a share of 13%. in the heavy segment above 16 tons. As for registrations, last year we had 1,500 registrations in the first quarter, now we have 840. This is 650 cars less year on year.
So you are continuing the downward trend, because in 2023 the company recorded a decrease in registration by approximately 21%, while the entire market increased slightly. What is the reason for this worse result?
If we analyzed registrations by quarter, we were still the market leader at the end of the third quarter. In fact, our share dropped significantly in the fourth quarter of last year and this trend continues. This is the result of several factors. First of all, by introducing a new generation of trucks, we have entered a different level of quality, a different level of driver comfort, a different level of economy, but also a different price level. Unfortunately, with the current slowdown in the industry, which has been going on for almost a year and a half, our clients are looking for more budget-friendly solutions.
So your product is not suitable for these difficult times?
I assess this situation as short-term, because today customers are actually forced to look for savings. However, let’s look a little longer and take into account other aspects that were previously taken into account and it is certainly a matter of time when they will be taken into account again, such as driver comfort. As demand for transport dropped, so did the need for drivers. And today it seems that this problem has fallen off the agenda a bit.
But this problem has not disappeared and with the return of demand it will come back with a vengeance. Because eastern countries such as Ukraine and Belarus as a reservoir of drivers are already exhausted for various reasons. We know that the availability of drivers from deeper Asian markets is difficult. As for Poles, the biggest challenge is high middle age and the fact that many drivers are retiring or approaching retirement age.
So I see a very big challenge when the economic situation improves, in which our product will be a great help in recruiting and retaining drivers. DAF has always been the leader here when it comes to driver comfort. Our cabins are the largest on the market and are unrivaled when the driver spends 2-3 weeks away from home.
The second thing is VECTO (a Vehicle Energy Consumption Calculation Tool] and its impact on road tolls. Today, we have only a few manufacturers who are able to supply cars with a classic drive system and such a cabin for international transport in the second and third emission categories.
This means savings of 1.6 cents per kilometer when tolling in Germany. But we should not forget that this is a pan-European recommendation and member states should actually implement it this year. There is already talk of Hungary, Austria, Denmark, the Netherlands, and also Poland. We therefore hope that this competitive advantage, which will involve lower road tolls, will also work to our advantage.
I estimate that it is only a matter of time before the market returns and we will have arguments to defend the quality we offer.
Now that you’ve touched on this, when do you think the market will come back? And what will this year be like in terms of registration for the industry and for you?
I may surprise you, but I rate this year as quite good. If a few of our clients were sitting here with us, they might be wondering.
There are forecasts of 20%. drop in registration this year….
I expect a smaller decline. I think the trend we have now, which is about 15 percent, will continue. However, this still means that we will end up with a market of 26-27 thousand newly registered trucks. It’s not a bad market at all. If we take into account the mood in the industry, where many of our clients are really struggling to survive, this is a really strong market.
And what’s more, on a European scale, our forecasts are that the heavy segment will reach approximately 300,000 registrations this year. These are levels from strong pre-pandemic years. And now, on the one hand, of course, we have the mood in the industry, the economic situation, which is bad.
However, we also have a fleet that has aged quite a bit over the last post-pandemic years. Today, we are reaching a situation where the customer has to choose whether to continue using a car that is 4, 5, 6 years old and practically worn out, and exposes him to higher road and service fees. Or, despite everything, invest in new equipment that will bring all these and other benefits.
To sum up, I do not expect any Armageddon on the market.
What does your order portfolio currently look like?
From the factory’s perspective, over the last two months, and I must admit that the turn of the year was a bit slower, we have been collecting quantities comparable to current production, it is keeping up with demand. So there are no delays. Today, the waiting time for a vehicle is approximately 3-4 months.
Coming back to registration, when can we expect the first electric DAF trucks to be sold on the Polish market?
Our new electric model range will be available in the third and fourth quarters, depending on the model. And in the previous range, we did not sell any electric vehicles in Poland, because the market was still very small at that time. We sold several hundred cars in Europe, but none of them came to Poland.
How do you see the prospects for the electric truck market in Poland? In Europe, they still have a small share in the total fleet, despite many incentives. Such as toll exemptions in Germany. Have you noticed more inquiries about electric trucks from Polish carriers due to this toll increase?
No, the issue of tolls does not arouse any greater interest in electric trucks. In the first phase of sales of electric vehicles, which we are more or less behind as a market, these were mainly PR activities. A carrier of some large corporation helps them present themselves as a socially and environmentally responsible company.
However, we are slowly entering a different logic in Poland. This is also related to the zero-emission vehicle subsidy program, which I expect to be announced this year. There is talk of co-financing not only vehicles, but also infrastructure, i.e. fast chargers along the TEN-T corridors. Here we will talk more about whether there is a business case or not, because so far there has been none. Here, too, I expect a significant acceleration in Poland.
However, regarding what you said about toll exemptions, I do not think it will affect the demand for electric trucks. Because, despite everything, their ranges and access to infrastructure mean that electric trucks are currently not sold for long-distance transport.
Exactly, that’s what I wanted to bring up. There are many skeptical voices regarding electric transport. However, Poland has a strong position in international, long-distance transport. Which in itself currently limits demand for them. Electric cars can be used for deliveries in the city or from the factory to the warehouse, but they cannot be used abroad.
Correct. And now we can argue about whether the glass is half empty or half full. If we wanted to see this empty half, I totally agree. Given the current state of infrastructure, availability of charging stations, etc., it is difficult to expect electric vehicles to conquer the long-distance transport market. However, and this is the full half of the glass, trucks are used in many other tasks where this type of drive seems to be ideal. The first thing that comes to my mind is municipal services.
If we take garbage trucks or hooklifts that collect containers from the center, from construction sites, etc., why not start this revolution with them? In Warsaw, an electric bus is not a phenomenon for anyone, i.e. the know-how is there, the infrastructure is there.
Why not choose electric garbage trucks to start with? And then, as you mentioned, urban distribution, distribution between the factory and the transhipment hub. And we have a lot of questions here.
So these conversations are ongoing, interest is growing very quickly, including: thanks to the programs mentioned. So I expect that we are actually on the eve of a big acceleration when it comes to electric vehicles. We see that many customers are asking and doing their own analyses, but the moment of launch of this market will be the launch of funding under the government program. Today, everyone is holding off on decisions because they are waiting for what is to come.
The transport industry in Poland is highly fragmented compared to the European one. There are no giants here, such as Waberer’s or Girteka. There are small, small companies for which buying an electric car, which, however, is more expensive than a conventional one, will be a big burden. Will this program change that?
Just like I said, this program, in my opinion, will be a moment of great acceleration. Despite the potential help that customers will be able to receive, it must be remembered that transport companies that decide to do so will have to change the way they calculate this business case.
It’s not like today, when I have a truck with a classic drive system, I drive it on a certain route for a year or two and then, if the job ends, I can easily transfer the vehicle to another proverbial “job”. In the case of electric cars, these cars are tailor-made, let’s take the battery packs, for example. Because, for example, there is no point in investing in the maximum range if I will cover 100 km. It is better to take fewer batteries, pay less for the car, invest in a charging standard, but gain more load capacity.
This is getting quite complicated and will also require different types of contracts, more long-term ones. This will also contribute to the revolution I am talking about.
Revolution… Isn’t this really a revolution imposed from above without looking at the reality below? Aren’t the requirements and ideas coming from Brussels ahead of reality and setting unrealistic goals?
At first glance, it certainly seems that the EU “overdid it.” But, for example, the Euro 7 standard, which will be implemented at the end of this decade, including: focuses on reducing dust from cars. It’s about PM2.5 dust, which we talk about in Poland when we talk about smog almost every winter.
It’s hard to deny logic and good intentions. However, so far this has not been followed by strategic decisions regarding infrastructure. It’s easy to place demands on manufacturers. In fact, we are ready to meet these requirements. However, the customer still has to buy it. And without infrastructure, it will be difficult to convince him.
Well, if we’re talking about electric transport, the key issue is infrastructure, or more specifically its lack. It’s not even about the lack of charging stations as such, but they must be adapted in terms of power, capacity and infrastructure to service trucks. The latest Eurowag report on the readiness of European countries to implement electric truck transport showed that appropriate charging stations are the Achilles’ heel of this project. Who is to build this infrastructure? Because some manufacturers, such as Volvo and Traton, are taking matters into their own hands and have announced plans to build a network of charging stations…
This is a very good question. As far as the pan-European situation is concerned, this is the bottleneck of the entire system. Interestingly, it turns out that the availability of electricity is not as big a problem as the infrastructure in the place where it is needed. It turns out that there should be no shortage of electricity in Europe, at least in this initial phase. However, ensuring that the current is where it is needed and has a sufficiently strong connection is a big problem.
There is another side of the coin. In fact, powerful chargers designed for passenger cars should be excluded from these analyzes. Precisely because of accessibility and access for trucks. This car must drive to the charger relatively comfortably.
To sum up the current state of infrastructure in Poland (and elsewhere), the vast majority of charging stations are the responsibility of the customer or their client, i.e. they are mainly located, for example, at a factory or a warehouse.
I think that the subsidy program I mentioned in the part about infrastructure, where we are talking about PLN 2 billion, is some answer to this problem. This government project provides for subsidies of 100%. costs. So, in fact, someone who installs a charger that will be public for trucks, i.e. at least twice 350 kW, will make money from it from day one. We want these charging stations to be located close to TEN-T corridors, relatively close to exits and widely accessible.
Are you considering installing such charging stations once the subsidy program is launched?
I think many of the dealers are considering this very seriously. We do not have our own representative offices, 100%. we operate based on an independent dealer network, so these must be investments by these companies. However, from what I know and what I can confirm, almost all of them are considering it very seriously.
What about hydrogen vehicles? DAF previously announced that it was working on a truck using this fuel. These vehicles would be an alternative to diesel in long-distance transport.
This is actually something we are thinking about. Currently, it looks like hydrogen will be an alternative to diesel in long-distance transport. However, no one is ready to implement it yet, because the infrastructure is an even greater challenge than in the case of electric vehicles, and the vehicles themselves are still mainly in the testing phase.
However, the technological challenges here seem to be even greater than in the case of electric vehicles, so we estimate the availability of these vehicles in the perspective of 5 years to a decade, perhaps even.
So, while you will focus heavily on electric vehicles in regional transport, you will still stick to diesel for long-distance transport?
I think the vast majority of it will look like this.
Speaking of clean fuels, last year DAF also informed about the possibility of using low-emission HVO fuel (hydro-refined vegetable oil – editor’s note) …
In fact, it is a fuel whose use reduces CO2 emissions by approximately 90%. due to the fact that it is fuel from recycled vegetable oils. The quality is even better than diesel because it does not contain biocomponents. HVO can generate better combustion due to its higher energy value than diesel fuel.
In fact, every vehicle, not only the latest generation of DAF, but also the previous one from 2017, can run on this fuel without any problems.
However, this fuel is only available in some countries, such as Scandinavia or the Netherlands. In Germany it is available, but not at gas stations, you can order it and use it at the base. But I admit that many customers have been asking about it recently, because it is also a way for them to demonstrate emissions reduction.