Jörg Gnamm: What Matters Most in Europe's Truck Market

As the gap between competition narrows in Europe's truck market, companies will need to differentiate to win. Jörg Gnamm, a partner with Bain's Industrial Goods & Services practice, discusses the criteria of performance and quality, as well as the two platforms of differentiation that will help truck makers succeed in the future.

Read the Bain Brief: What Matters Most in Europe’s Truck Market

Read the transcript below.

JÖRG GNAMM: We surveyed 600 truck customers of fleets in Europe's top 10 countries on key purchasing criteria. We do this survey every 4 years, and this is now the fifth time in a row. The key outcome this year is that the winners will be the ones who cracked the code on digital offerings and customer relationship building.

What are the highlights on the key purchasing criteria? First, the criterion which remains the most important one is value for money, and the key factor in it is total cost of ownership over the lifetime of a truck. And this is more important than the pure new sales price of a truck.

Secondly, customer relationship building as a criterion is getting more and more important over time. And that can be addressed by the truck OEM by superior service at the point of sales over its lifetime.

Thirdly, the brand image is decreasing in importance. That's interesting because performance often associated with the brand is getting hygiene. Overall, we can see that the performance in Europe of the truck makers is moving closer together. So the gap between the premium players and the low-cost players is narrowing down.

Therefore, truck makers need to differentiate. And we see clearly out of the study two platforms of differentiation. One is customer relationship building, which we saw is increasing in performance, and is the criterion which shows the largest performance spread amongst competition.

And secondly, digital offerings: We see a clear pull for digital offerings if they impact TCO. We also see in the study that the customers are then willing to pay for it. Services which do impact TCO are services like fleet management, like remote maintenance, or like driver-behavior monitoring.

So overall, we see the winners of the future will be the truck makers who master the table stakes of hygiene factors like performance and quality, who focus on customer relationship building, and double down on digital offerings impacting TCO.

Read the Bain Brief: What Matters Most in Europe’s Truck Market