Person of Interest – Now, the future, and the race against time

In Person of Interest15 MinutesBy NZ Trucking magazineMarch 16, 2018

Marc Llistosella – president and CEO of Mitsubishi Fuso Truck and Bus Corporation

Marc Llistosella, who steps down from his role a president and CEO of Mitsubishi Fuso Truck and Bus Corporation later this year, visited New Zealand recently and took time out to meet with journalists and discuss Fuso‘s current projects, and what‘s just around the corner in both a micro and macro landscape.

Llistosella has held a number of roles in Fuso parent Daimler since 1994, and has been in his current position since 2015. Feathers in his cap include establishing the Daimler India Commercial Vehicles operation and spearheading the genesis and development of the e-Fuso brand, with eCanter already in series production as of last year.

Daimler Trucks Asia currently produces over 170,000 trucks per annum made up of 1280 variants across two brands – Fuso and Bharat Benz. It generates approximately US$8bn in revenue and employs more than 15,000 people. Accompanying Llistosella on the trip was Ilan Elad, director Region 2 global sales (that region includes us, obviously), and Florian Laudan, head of communications for Daimler Trucks Asia.

Fuso NZ managing director Kurtis Andrews said it was possibly the first time a Fuso global CEO had been to New Zealand. The trip came about largely on the back of an outstanding first year for Fuso NZ Ltd. An agreement at the outset of the new importer and wholesaler arrangement saw a target set of a CEO‘s visit on the completion of 1,000 sales. Llistosella said, “I could not foresee this would happen
in only one year and so we have to keep our word.” He spoke highly of the new import and wholesale arrangement, and of the Andrews family‘s understanding of people, product, and placement, and the relationship that led to the year one result.

Llistosella spoke about the Fuso brand revival, restructure, and growth since being given a mandate to grow the brand without constraint by parent Daimler in 2015.

“For the fifth time in a row we have the highest historical EBIT. For the fifth time in a row we have decreasing costs of quality related costs.”

He talked at length about Fuso‘s two product lines, the ‘e‘ brand Fuso, dedicated to electrification, and the traditional ‘classic‘ brand. When asked about the fact that at some point they will compete and vie for a share of the same market, he said, “if we don‘t do it someone else will do it and we will be out of the game”.

For the immediate future (10 to 15 years) a dual development path for both ‘e‘ and ‘classic‘ brands will remain.

In regard to eCanter and e-Fuso (the latter still currently in development but well past a prototype and certainly not far away from the global stage – 2021 for Japan), he pointed to the success of eCanter as a mass-produced e-commercial vehicle, the only other coming from BYD in China. He noted China was where Fuso/Daimler saw the fiercest competition coming from in the future despite the ‘Hollywood style‘ R&D and release programmes catching all the limelight in the US.

“They [China] are doing it, and massively investing into ‘e‘.”

With 60% of the world‘s population expected to live in an urban environment by 2030 or just after, Llistosella said focusing on and producing metro e-commercial vehicles to replace diesel ones was obvious. He noted that demands on infrastructure even today are such that most big cities in the developed world are struggling to accommodate the rate of urbanisation and that this didn‘t augur well for places like Africa, India, parts of Asia and South America.

Placing a thousand eCanters into Auckland would have a CO2 savings impact of 16,000 tonnes per year, equivalent to the absorption capacity of a forest the size of Rangitoto.

eCanter has a range of 150km with a capacity of 4.3 tonne including body and load. Compared with its diesel cousin the current eCanter 1.0 comes with a payload disadvantage of only 200kg and that‘s improving all the time.

“The payload disadvantage gets diminished every year. We are currently working on the 1.1 with software and battery updates. The 2.0 will be launched next year,” said Llistosella.

Annual production numbers for the eCanter will grow as the battery pack supply chain matures and a continuity of supply for a given output can be assured. This, and the specific targeting of eCanter in metro distribution roles, have been the two reasons the truck has been on a staggered city-to-city launch programme around the globe.

“This is a series produced truck, not a prototype. With a prototype you can do anything. We can produce it in the line,” Llistosella emphasised. “Currently demand is much larger than we can produce.”

The e-Fuso, with a 350km range and 11.2 tonne payload, is the next step and represents a paradigm shift in areas like cab and driver environment, not just propulsion system.

Llistosella noted that line haul trucks are a far more difficult proposition. Battery size (weight and space), heat, charging requirements in relation to source capacity, speed, and the degradation batteries currently incur when under rapid charge, mean full electric is still not yet a viable option in this sector.Hydrogen cells, although inefficient when looking at the ‘well- to-wheel‘ philosophy i.e. energy consumed in producing theend energy product, may offer some form of solution whenhybridised with electricity.

The other significant pillars moving forward he cited as autonomy and connectivity. Fuso recently conducted a successful multi-brand platooning trial on clearly marked main arteries in Japan. Llistosella said the Japanese authorities want to push the development of platooning ideally to a level 4 autonomy – full self-drive under certain conditions. Japan too, has a chronic driver shortage. The intense stop/go environment in Japan make fatigue and frustration significant contributors to a generally poor uptake into the industry.

He said connectivity and ‘e‘ go hand in hand. The multi- brand platooning trial was hugely important becauserealistically fleets are multi-branded.

The Japan trials involved three and four trucks. There‘s a keenness to extend this to five and six but the footprint of the trucks on the road starts to add complications to traffic flows.

Connectivity will be a huge player in the future, reducing downtime for customers and OEMs via applications targeting predictive maintenance and advanced driver analysis. Llistosella emphasised connectivity over telematics as he said technology has now moved past simply collecting data. Fuso is engaging with business partners like Bosch, Conti, Intel and Cisco, investing heavily in the analytics and information dissemination around big-data and how that‘s presented to customers, dealers, and their own people for fast and clear
decision making. Interestingly he noted that to date the majority of customers trialling the advanced connectivity systems are most interested in where the truck was and how was it being driven – acceleration and braking characteristics. The ability of the system to provide two-way information was highlighted with an example where it detected a customer changed the oil on a truck but refitted the old filters.

From the customer‘s perspective the benefits of such monitoring include the service agent‘s ability to know exactlywhat the truck needs at the next service. Parts can be pre-ordered and exact resources allocated prior to arrival, meaningminimal downtime for the vehicle. The technology builds adatabase that allows algorithms to evolve and more accurately identify patterns for predicting potential warranty issues prior to the event. In Japan, where the technology has been deployed already, Llistosella said they estimate US$5m dollars worth of potential warranty costs had already been saved. “That makes us very, very confident that this is the future.”

In regard to privacy, customers will hold the key to authorising what data is collected, and who sees it. But Llistosella also brought things back to basics. “The nice things, electronics, connectivity, autonomous, all sounds super, but the basis is the day-to-day work of the customer. The evidence that you have at least a competitive fuel efficiency, and have a perfectly running fill rate of spare parts, that you have trained mechanics: for the press it‘s boring, for the customer it‘s the day-to-day business. This is the 95%. The other 5%, that‘s the ‘shiny‘ thing, that‘s the cream in the coffee, but if the coffee‘s rubbish the cream will not save it.”

On the subject of the future he was optimistic, cautionary, and somewhat sobering. While he clearly thought ‘e‘ would continue its rise in metro distribution and diesel would remain strong on heavy line haul for at least another 15 years, he tempered his comments with lessons learned in the information revolution and disparaging predictions others made on the likes of Apple in the early part of the century.

“Our forecasts are completely narrowed to our experiences.” This is why he welcomed the likes of Tesla and Nikola to the party as they forced traditional thought paradigms and boundaries to be broken down and scrutinised.

The one potential game changer he identified was China.“China wants to be in a new game. China wants to be in a leadership position. Currently in the car industry they have spent billions of Euros and dollars. They want to compete with the existing brands.”

Llistosella pointed out that China‘s investment has bypassed Euro 6 and instead they are concentrating on ‘e‘, announcing recently an intended US$25bn investment in a recharging infrastructure.

“They want 4.2 million power recharging stations in China. Currently we have 750 in Europe.

“This is what makes the industry so interesting. Because for the past hundred years we had gasoline, we had diesel, we had the injection and then the common rail, always one direction, the direction was always clear. Now the direction is not so clear, nobody knows.” He went on to highlight even how rapidly battery development was occurring and how different that might be in five years.

As far as the broader future is concerned he emphasised the scale of the issues the planet faces. With global average temperatures rising each year for the past three years he cited even a significant shift in one year of the world‘s e-vehicle fleet from 0.65% to 1.2% of the 1.1 billion total vehicle population as being nothing. “It would have next to no impact on the real emissions. Insignificant.”

When quizzed on the key driver for change he firmly placed that at the feet of the end consumer, that the demands of society pressuring those in power will always be the key determiner of the pace of change.

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