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Chip shortage is easing, says world’s biggest truck-maker Daimler Truck Holding AG

Daimler Trucks North America, whose brands include Freightliner and Western Star, and rival PACCAR together control more than 70 percent of the U.S. Class 8 heavy truck sector, according to John Stark, editor of Stark's Truck & Off-Highway Ledger. (Twitter)Premium
Daimler Trucks North America, whose brands include Freightliner and Western Star, and rival PACCAR together control more than 70 percent of the U.S. Class 8 heavy truck sector, according to John Stark, editor of Stark's Truck & Off-Highway Ledger. (Twitter)

According to the CEO of Daimler Truck Holding AG's Mercedes truck brand, the company sees positive signs of moving past the global chip shortage that has plagued manufacturers worldwide.

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The world's largest truck-maker, Daimler Truck Holding AG, sees positive signs of pushing past the global chip shortage, according to Karin Radstrom - the CEO of the company's Mercedes-Benz truck brand. Following months of plant interruptions due to component shortages, the order backlog is keeping factories busy even as the global economy shows symptoms of faltering, according to Radstrom, who also oversees the truckmaker's European and South American operations. She added that it had remained unaffected by coronavirus lockdowns in China so far.

“It’s better, it’s not perfect, but it’s better than last year," Radstrom said in an interview. “I try to not celebrate too early, we’re still monitoring the situation closely."

Daimler Truck (which also counts the Freightliner, Western Star and Fuso brands) and rival Volvo Group had to cut production because companies throughout the world couldn't get enough of the high-tech components even as demand for transportation increased. The global chip shortage is no longer causing major production stoppages, according to Mercedes-Benz AG production head Joerg Burzer, who had claimed this week that the chip shortage was no longer causing serious production stoppages.

As companies scrambled to replenish dwindling stockpiles, a global truck shortage contributed to an increase in shipping prices. While concerns about the global economy are growing, Radstrom said there are no signs of a slowdown in truck production, which is normally a recession-prone industry.

“There’s still very, very high demand relative to supply," Radstrom said. “Despite the changes in the economy, we don’t see any downturn in demand. It can change very quickly, however."

Daimler Truck, which will split from Mercedes in 2021, is aiming to boost margins after struggling in the past to convert its unrivalled industrial scale into returns comparable to Volvo and Paccar Inc. Meanwhile, electric-vehicle companies such as Tesla Inc. and Nikola Corp. are eyeing the trucking sector in the wake of the global crackdown on transportation pollution.

Daimler Truck's zero-emissions plan focuses on developing battery-powered trucks for short trips and hydrogen fuel-cell vehicles for longer routes. In 2021, the company began production of its electric eActros vehicle in Germany. Battery big rig orders increased to 619 in the first quarter of 2022, up from 169 in the same time of 2021.

“Infrastructure has to be sped up," Radstrom said of challenges facing the company’s push to accelerate its electrification strategy. “We also need to know where the electricity and green hydrogen will come from. I’m in favour of carbon pricing to speed it up."

(With agency inputs)

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