Cummins sees growth in truck sales and completes deal to acquire Meritor
Sales of truck engines in North America will grow significantly this year, the new president of Cummins said in the company’s second-quarter earnings and loss report.
Jennifer Ramsay was named president and chief executive officer of Columbus, Indiana-based Cummins Inc. in mid-July. She succeeds Thomas Linebarger, who became chairman of the board. Ramsey has been chief operating officer of Cummins since March 2021, and before that she oversaw Cummins’ global operations. This was her first call to investors as president and CEO.
“We maintain our forecast for heavy-duty vehicles in North America at 250,000 to 260,000 units in 2022, up 10-15% from a year ago,” Ramsey said during the earnings announcement. A transcript of the talk is available . “The supply chain constraints facing our industry continue to limit our collective ability to fully meet strong end customer demand. In the medium-duty truck market in North America, we continue to forecast a market size of 120,000 to 130,000 units, an increase of 5-10% over 2021.”
Despite international challenges, she said Cummins is still on track to increase revenue for the year by 8% year-on-year.
“This outlook reflects stronger performance in North America and weaker market prospects in China, as well as the suspension of our operations in Russia indefinitely,” she said.
Cummins suspended operations in Russia during the first quarter and recorded a $158 million charge.
In China, Cummins expects total revenue to fall 20-25%, double previous estimates. Demand for heavy- and medium-duty trucks in China is down 50%. The light truck market and excavator sales are also down significantly and have surpassed forecasts. Revenue from joint ventures in China is expected to increase.
Ramsey outlined some important developments for Cummins in the second quarter.
In April, Cummins completed the acquisition of Jacobs Vehicle Systems . This acquisition brought Cummins engine braking, cylinder deactivation, start-stop control and thermal management technologies, which it said are key components to meeting current and future emissions standards.
On 26 May, Meritor Inc. shareholders voted in favour of an offer to acquire Cummins, Ramsey said. Meritor specialises in axles and brake technology. The deal was finalised in a press release on 3 August.
Also in the second quarter, Cummins announced several joint projects with the following partners:
Daimler Truck North America and Scania to supply fuel-cell electric powertrains for heavy-duty vehicles.
Komatsu to develop zero-emission transportation equipment, including hydrogen fuel cell solutions for large haul dump trucks.
Chevron and Walmart are integrating Cummins X15N renewable natural gas engines into Walmart’s fleet of heavy-duty trucks.
“This customer collaboration is an important step in line with our Destination Zero strategy to grow our company, our products and our customers’ products in line with the technology needed for a decarbonised world,” said Ramsey. “This strategy, which represents a significant growth opportunity for Cummins, includes reducing carbon emissions now by improving engine-based solutions that are widely available today and rapidly advancing zero-emission technologies of the future.”