Late yesterday afternoon UD Trucks of North America announced that is will no longer be part of the North American truck market. Reasons given for this decision was a combination of factors, including the continued shrinking of the cab-over-engine market segment and the accelerating cost of regulatory compliance.
UD Trucks offered a full line of Medium Duty Class 3 through Class 7 trucks for the US Market since 1985, but it was clear for some time that their market share was in decline since the Great Recession of 2008, and coupled with the loss of their class 3 and class 4 truck that was last offered in 2010, along with an ever escalating erosion of profit margins caused by a strengthening of the Yen, made this decision unavoidable.
In the letter written to their dealers, the President of UD Trucks North America states:
“Trucks in UDNA and dealer inventory will be sold to end-users, and warranty and parts support for the population of UD trucks currently in the market will continue as usual. There is still limited production capacity for 2013MY vehicles. Dealers can place orders until October 15, 2012 for trucks to be built before year end. Orders will be accepted on a first-come, first-served basis subject to available production capacity, and production orders are non-cancellable. There are approximately 300 trucks remaining in UDNA inventory”.
With the retreat of UD Trucks from the American Market, there will be but one Cab Over Engine Class 6 and 7 truck left built by Paccar in Mexico and marketed under both the Kenworth and Peterbilt brands. The design comes from Paccar’s European DAF Truck Group, and there will be a strong push to target customers that were once strong advocates of the larger Cab Forward truck market once dominated by the Japanese Brands of Mitsubishi Fuso, Isuzu, Hino, and UD.
Since I still market the product through a dealer, I have the advantage of being in the trenches, so to speak. UD Trucks has a price disadvantage over every other truck on the US Market, with dealer net prices that are worlds apart. Here are just two examples: A UD Trucks 1800 Class 5 cab and chassis with basic equipment (Allison 1000 Automatic, Air Conditioning, AM FM CD, Windows – Locks – Keyless Entry, and a 245HP 6-Cylinder) is nearly $18,000 more expensive than a Mitsubishi Fuso FE-180. Granted, the Fuso only has a 161HP 4-Cylinder, and it is a smaller cab, but it is a class 5 truck, and it will get better fuel economy.
Another example is the Class 7 truck, with a 33,000# GVW rating. They are still a single axle truck but you will need a Commercial Drivers License to drive them. The UD Trucks 3300 is at least $11,000 higher than a competing Hino 338 Conventional, and the Hino has a superior warranty. They both have 6-Cylinder Diesels, Allison 2500 RDS Automatics, Air Brakes, and standard comfort and convenience features, but the Hino is assembled in West Virginia, while UD still imports their trucks from Japan.
I have had the distinct privilege of working within Nissan Diesel America from 2005 right through the economic downturn of 2008. I became redundant when unit sales started to slide, and it was a business decision to merge my responsibilities with someone with more experience who could easily take over my territory in July of 2009. 2005 was a high water mark in terms of deliveries (something like 3,500 trucks). Last year, they managed a little over 800 units, and this year they were on pace to deliver half that.
Nissan Diesel America (NDA) was founded by Nissan Diesel Motor Company in February 1984. Nissan Diesel Motor Company built UD Trucks, and over the years they earned an outstanding reputation for quality, dependability and durability. The “UD” trademark, which originally stood for “Uniflow Diesel”, taking its name from Nissan Diesel’s successful Uniflow Scavenging Diesel engine. It was decided early on to base the corporate identity as UD Trucks, and with the UD symbol prominently displayed on the truck and in all advertising and literature, it was hoped that it would emulate other great trademarks like IBM, 3M and USX.
Three years of research preceded the arrival of the first UD Trucks in the United States. Technical issues concerning EPA certification and federal safety standards were addressed. Competitive product studies were completed, and test marketing was conducted with several potential customers. Personnel recruiting started in June 1985 to staff the home office and field organizations.
The first UD Trucks marketed in the U.S. were the Class 7, CP Series (CPB12 and CPC12). The first shipment of UD Trucks arrived in the U.S. in June 1985 at the port of Jacksonville, Florida. It was a decision to enter the U.S. market with the Class 7, CP Series because it was well suited to the U.S. market. Research showed that the Class 7 market was growing at that time due to the changing U.S. economy. These changes included a shift from heavy manufacturing to a service based economy, changing distribution methods and increased importance of “just-in-time” inventory control systems. The CPB12 and CPC12 were the right trucks for the U.S. Class 7 market. To supplement the Class 7 products, three additional trucks were introduced in 1986 — the Class 5, CMA83; Class 6, CLA83; and Class 7 tractor, CPC12T.
In 1988, Marubeni Corporation, a large Japanese trading company, invested in Nissan Diesel America. Marubeni conducts business in many different markets such as lumber, automobiles, construction equipment, hydroelectric projects and trucks. The partnership of Nissan Diesel Motor Company and Marubeni strengthened the position of UD Trucks North America in the United States.
During 2002 UD Trucks was awarded the ranking of Highest in Customer Satisfaction Among Owners of Cab-over Medium Duty Trucks by the 2001 J.D. Power and Associates Medium Duty Customer Satisfaction Study. This is the third time that UD Trucks had received a Powers Award, but the biggest changes were yet to come.
For the 2005 model year UD Trucks introduced a new line of engines; the MD175 4-Cylinder Diesel and MD230 6-Cylinder Diesel, offering electronic common rail fuel systems, variable nozzle turbocharging and exhaust gas recirculation technology, enabling these engines to meet the 2004 Federal Emmissions Standard. These engines were actually manufactured by Hino Motors Ltd. of Japan, and was seen at the time as a way of complying with the US Emission Standards without UD Trucks developing their own proprietary solution.
Effective on March 31, 2007, Nissan Diesel Motor Company became a 100% subsidiary of AB Volvo. Volvo took advantage of the Nissan and Renault marriage which resulted in the spin off of the truck divisions of both companies. AB Volvo purchased Renault Trucks (which owned Mack Trucks of the US at that time), and eventually purchased Nissan Diesel, maker of UD Trucks.
Effective February 1, 2010, Nissan Diesel Motor Company announced its name change to UD Trucks Corporation. Building on the UD Trucks image that is marketed worldwide, Nissan Diesel America, following the lead from Japan, announced its name change to UD Trucks North America effective May 1, 2010 and relocated its Sales and Marketing department to Greensboro, NC within the very campus of the US division of Volvo.
Image Sources: UD Images from UD Trucks North America, Fuso Image from Supreme Corp., Hino Image from Hino North America, Kenworth Image from Kenworth Northwest.