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COVID or no COVID, the Australian road freight industry continues to run hot and leading the rush for trucks is heavy-duty supremo Paccar Australia, boldly led by its Kenworth flagship. But don’t go thinking Paccar’s powerbrokers are resting on laurels or aren’t looking far into the future. The way we see it, big things are brewing behind the scenes for both Kenworth and its ambitious DAF stablemate.

Despite all the hassles and hardships, Paccar Australia’s performance in 2021 is shaping up to be nothing short of outstanding. A sublimely remarkable achievement in a time of immensely uncommon challenges.

The numbers speak for themselves, and none speak louder than Kenworth’s.

By the end of September 2021, the market’s premier brand had delivered 1972 units, equating to 21.7 percent of the heavy-duty sector. Its nearest rival was Volvo, more than 800 trucks behind on 12.9 percent.

In effect, Kenworth at the end of the third quarter of 2021 was probably just weeks away from easily surpassing its 2020 full-year performance which saw 2114 new Kenworths roll out of the Bayswater (Vic) production plant. Indeed, Kenworth is this year comfortably on track to deliver around 2500 trucks.

Meanwhile, corporate counterpart DAF has been also on an upward trajectory. After notching respectable numbers in 2020, DAF at the end of September this year was just a gnat’s knuckle away from cracking the 500-units mark for the first time in the brand’s Australian history.

Still, 2020’s numbers certainly weren’t modest or meagre, retaining Kenworth’s and Paccar Australia’s heavy-duty market leadership despite gruelling difficulties as COVID-19 first raised its ugly head and took hold, at one point forcing the company’s US parent to decree a month-long shutdown of all Paccar plants. The shutdown was, however, a wise move designed to give local Paccar executives time to devise entirely new safety protocols for work routines at every level of the company structure.

It wasn’t an easy time though. Not by a long shot. In an exclusive interview at the end of last year, Paccar Australia managing director Andrew Hadjikakou defined 2020 as, "… a challenge for everyone, like nothing any of us have experienced before and hopefully, like nothing any of us will have to experience again."

Even so, the company’s operational structure continued to function with typical efficiency, prompting Hadjikakou to report, "We’ve added a lot of new staff and there are more to come. We’ve certainly not retrenched anyone."

The employment trend has continued this year with Paccar Australia recently advertising for even more staff in both head office and on the production line.

Keeping the production line moving has, of course, been the critical factor and it was on this point that Andrew last year paid tribute to the established benefit of a largely homegrown supply chain.

"Our supply chain was intact and that’s one point where I feel particularly proud of being Australian-made, with so much of our supply base not coming from overseas but being sourced locally. In many parts, our suppliers are within a 10km radius of the factory."

"That is a big benefit to us. Huge!" he exclaimed. "We didn’t have to rely on the long lead times of overseas supply chains (and) I knew we would be shielded from much of that because so much of our business really is Australian-made."

His assertions may have sounded like corporate cliché but there’s no denying that throughout COVID’s impacts, the company’s inherent ability to produce plenty of locally-built trucks while most other brands have struggled to maintain a consistent flow through international supply lines, continues to be an absolute boon to Paccar Australia’s business.

As Andrew was quick to point out though, government support also came at the right time. "What the (federal) government has done to stimulate the economy with the instant asset write-off and depreciation schedules have definitely benefited capital purchases such as trucks, giving truck owners immense economic benefits," he said during the interview last year.

"It really is once-in-a-lifetime stuff and the fact that it will be available until June 2023 bodes well for all of us in the industry."

By the end of 2020, it was a somewhat emboldened Andrew Hadjikakou who looked forward optimistically to 2021.

"Everything is progressing to plan," he emphasised. "We’ve had to address how we do things to keep everyone safe, but 2021 is a milestone year for Paccar and there will be plenty to cheer about."

The major milestone was, of course, 50 years of manufacturing Kenworth at Bayswater, but there was also a critical new factory expansion which, according to Andrew, will deliver a significant increase in local assembly of DAFs.

By 2022, he asserted, production capacity at Bayswater is expected to be doubled and the obvious goal is for DAF, specifically 11 and 13 litre CF models, to consume a considerable slice of that extra capacity.

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After the excitement and celebration of Bayswater’s 50 years of truck manufacturing in March, attended by Federal Treasurer Josh Frydenberg, Paccar’s optimism was again on display a few months later at the Brisbane Truck Show where the first public appearance of the new T410 SAR model and a special edition ‘Legend SAR’ headed a first-class presentation of Kenworth and DAF models. COVID, it seemed, was being progressively pummelled into the background.

But early confidence was in for a big hit and as most Australians can now attest, the back half of 2021 has been a shocker. Victorians have been again hammered particularly hard by lockdowns and at the time this report was written in mid-October, the Bayswater plant was in the grip of a snap shutdown after a couple of workers tested positive to COVID-19 as the State endured a sharp spike in infections.

"It is perhaps a tougher year," Andrew said when asked recently if the current year is harder than the last. "People presumed the challenges of COVID would be resolved by now but the situation is worse."

Again though, the fundamentals stayed strong. "The procedures we integrated into our plant and support functions early last year have stood the test of time and are now just part of what we do."

Nonetheless, it’s a conciliatory Andrew Hadjikakou who adds, "We are not alone. We face the same headwinds all automotive manufacturing is grappling with. No company is unscathed by these challenges and a robust market means most brands have lead times longer than they’d like."

All up, it has been a hard pill to swallow after such a bright start to the year.

However, as 2021 now claws to a close, there is at least glitter midst the gloom for Paccar Australia: Market leadership is assured with Kenworth far ahead of competitors and DAF doing better than ever; the two brands at the end of the third quarter collectively accounted for 26.4 percent of the total Australian heavy-duty truck market, well ahead of a vacillating Volvo Group Australia and a determined Daimler Trucks Australia; the Paccar Australia order bank for 2022 is said to be close to capacity, no doubt boosted by the astonishing success of the ‘Legend SAR’ which surpassed even Kenworth’s most optimistic projections by notching more than 750 orders when it went on sale for just one day.

Moreover, the road freight industry continues to gallop along, fuelling a heavy-duty truck market shaping to crack 13,000 units for the year. And putting the cream on the cake as most Australians now jump to be jabbed, politicians of most persuasions are looking at lockdowns as a last resort in the COVID crisis.

Yep, it’s definitely not all bad at Bayswater.

And then, of course, there are those ‘other developments’ to look forward to. Those secret special projects. Those whispered design and engineering tasks that look to tomorrow rather than today. Those things that Paccar Australia historically plans and prepares for so well. Those things almost always bubbling behind closed doors in quiet corners of the Bayswater bunker. Things like …

It would not be unreasonable, perhaps, to suggest that after so much effort and expense over recent years in development of dramatic new Kenworth conventional models – T610, T410 and the retro Legend SAR – Paccar Australia’s brains trust would now be heavily focussed on its cab-over class led, of course, by the evergreen K-series.

It is, after all, well over a decade since the launch of the all-conquering K200 which, as Kenworth defined it, was ‘more a complete transfusion than just a shot in the arm’ for the iconic K-series. As much as anything else though, the vastly refashioned cab-over was compelling evidence of the extraordinary design and engineering capabilities that exist within Paccar Australia.

The leap, for example, from the ergonomic nightmare of the K108 and its many forebears to the long overdue space and convenience of the K200 was nothing short of chasmic. In fact, so great was the evolutionary lunge in the minds of some (including this one), that the K200 is regarded as arguably Paccar Australia’s greatest engineering achievement in its half-a-century of Australian truck manufacturing.

However, the question now is ‘what’s next?’

Paccar Australia is not a company to sit idle and with rumours gradually gathering of a heavily revamped and renamed (K220) K-series contender, it now appears just a matter of time before big news breaks. Whether it’s 2022 or later is unknown, but while the certainty is that Kenworth will sooner or later launch a reconfigured cab-over flagship, the other unknown is whether the leap will be as great as that which marked the jump from K108 to K200.

Speculation, of course, can conjure all sorts of concepts but it would seem logical for any rebirth to at least include bold new styling cues and driver convenience features, and critically, some significant technology enhancements. Maybe, for instance, a standard safety package to finally take the fight for hearts and minds, literally, to the Europeans.

Predictably, Andrew Hadjikakou would not be drawn on what features a K200 replacement might include, saying only, "The K200 has been Kenworth’s best performing model since its release (and) we always have a range of products in various phases of their development cycle, K-series included."

Whatever, the seemingly ageless K-series is just one part – albeit a massive part, accounting for around 30 percent of all Bayswater production – in Paccar Australia’s cab-over coterie. The other part is obviously DAF and as senior Paccar people have stated numerous times, the Netherlands-based brand is the key to greater growth for Paccar’s Australian interests.

As we’ve reported before, ‘Kenworth is king but have no doubt, the Paccar pendulum is swinging more and more to a Dutch touch’ and it would be naïve and foolhardy in the extreme to deny or ignore the emergence of DAF as an increasingly powerful contributor to Paccar Australia’s future goals.

Whether by corporate dictum or commercial desire, or both, Andrew Hadjikakou has from the outset been a strong advocate for the Dutch brand and probably more cognisant of its long-term opportunities than any of his predecessors. And he is not without willing allies, including sales and marketing director Brad May, a rusted-on Kenworth addict who nowadays easily concedes that Paccar’s biggest potential rests with the Dutch truck.   

"It has taken a very long time and it hasn’t been an easy road with Kenworth as the cultural base (but) DAF is now a critical part of the Paccar culture," a resolute May said almost two years ago at the introduction of DAF’s current model range.

Yet whereas the versatile DAF CF range with its choice of Paccar MX-11 and MX-13 engines is winning increasing business and is at the core of Paccar’s plans to assemble more DAFs on Bayswater’s line, potential of the flagship XF model remains far from fulfilled. Simply put, the XF sits a very long way behind the market acceptance of premium Volvo, Mercedes-Benz and Scania competitors, and it will take something dramatic to bolster the lofty Dutchman’s influence.

Like its CF sibling, the XF draws its maximum power from the top 530hp/192lb-ft version of Paccar’s MX-13 engine and while those outputs may be ample for single trailer work, they’re largely off the pace for the bulk of the burgeoning linehaul B-double business. And Paccar’s people know as well as any, it’s the B-double business which holds the key to the XF’s future and in the process, pushing DAF’s potential to far broader horizons.

Unlike the CF though, an emboldened XF would also have the ability to impact on Kenworth’s existing cab-over business.

This is an issue which sits quietly, yet profoundly within Paccar Australia’s senior ranks but for now, there’s no clear-cut answer other than the certainty that DAF’s future in this country is being carefully nurtured.

A quick fix for the XF might appear to be the installation of a Cummins X15 engine. There’s no doubting the technical expertise of Cummins South Pacific and Paccar Australia to do such a job but the suggestion caused a few moments of quiet deliberation when Andrew Hadjikakou was asked late last year if such a project was on the cards.

Hedging his bets somewhat, he replied, "We are looking at all different opportunities (but) to fill that gap with a high displacement engine makes sense. We’ll just have to wait and see what happens with DAF." In short, apparent affirmation that a Cummins-powered XF is a strong possibility, but perhaps even greater affirmation that DAF in Europe will provide the platform and the final approval. Either way, a quick fix seems highly unlikely.

Fortunately, the fog is now thinning slightly and we may not have to wait too much longer for a clearer picture. There is, for instance, no shortage of talk about a new DAF cab being close to release in Europe and likewise, emerging rumours of an entirely new, lightweight big bore global engine from Cummins.

Similarly, there has been recent speculation of Paccar developing its own big bore engine, allegedly labelled the MX-15. This, however, is most improbable, though we’re certainly not ruling out the possibility of a Cummins engine one day bearing the MX mantle, particularly as Paccar Inc. pursues its corporate ‘Paccar Powertrain’ branding strategy. After all, the so-called Paccar 12-speed automated transmission is actually an Eaton Endurant gearbox, so given Paccar’s immense clout with companies such as Cummins, a Paccar-branded 15 litre engine is not beyond the bounds of believability.

But as for Paccar building its own big bore engine, the odds are miniscule. For starters, many high level Paccar executives from Australia and the US have been asked that question many times over many years and without exception, each has unequivocally and steadfastly answered, ‘No!’ As some like to point out, the big markets today are in the 11 to 13 litre class.

It’s easy to accept their answer as fact, simply because it would appear to make no economic sense for Paccar Inc. to spend vast sums on the development and manufacture of an entirely new big bore engine platform when the global demand and subsequent viability for high cube, high horsepower engines is relatively small and largely limited to low volume, highly demanding markets such as Australia.

The smart move, and Paccar is a very smart company, is to continue to rely on specialist suppliers like Cummins and Eaton for powertrain solutions, especially in the high horsepower class and even more so since the formation of the Eaton Cummins Automated Transmission Technologies joint venture.

Thus, long story short and with a generous rub of the crystal ball, here’s what may be an eventual scenario for DAF’s flagship XF to one day crack into the high horsepower class and in the process, bolster Paccar Australia’s ultimate aspirations for the Dutch truck: First, DAF’s European masters are said to be close to delivering an entirely new range of trucks and among these will be the foundation for a right-hand drive XF with substantial capacity to house and cool a big bore engine of, say, 15 litres.

Second, it is becoming more apparent that Cummins is on the cusp of announcing a highly advanced and completely new global engine which may first come to light as the M15. Built on a sculpted block similar in principle to the livewire Cummins X12 engine, it will be impressively light – as much as 250kg lighter than the current X15 – and therefore ease the burden of high front axle weights that currently trouble many European brands in Australia when punched by big bore engines.

In performance terms, it won’t surprise if this entirely new Cummins hits the market with more than 650hp and 2300lb-ft of torque.

So, put all these factors together with Paccar Australia’s formidable corporate network, engineering nous, and insightful market intelligence, it’s not hard to envisage a DAF flagship capable of digging deep into applications that are today largely beyond its ability.

And therein comes the biggest question of all: Will this top-shelf DAF be the thin edge of the wedge in eventually replacing Kenworth’s iconic K-series?

Maybe. Maybe not. As we’ve written before, the only certainty right now is that despite the increasing costs of producing K-series purely for the Australian and New Zealand markets, Paccar Australia is unlikely to ever voluntarily withdraw or kill off its classic cab-over.

Market forces alone will determine K-series’ future but judging by the fact it is still Kenworth’s biggest seller, this incredible survivor will be around for many, many years yet. Investment in a new K220 version will prove it beyond doubt.

In effect, if people are prepared to keep paying for K-series in sufficient numbers, Paccar Australia will almost certainly continue building it.

But as one rusted-on Kenworth addict said some years back in a rare moment of quiet concession, "Nothing lasts forever."

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