Elkhart Truth: Wakarusa manufacturer Utilimaster expands portfolio of green vehicles
WAKARUSA — Even while the electric vehicles from Think North America, Chevrolet and Bright Automotive have apparently run out of juice and raised public ire, Utilimaster is embracing the alternative fuel vehicles and more fully entering a green market that is greatly in flux.
The truck body manufacturer is adding propane and all-electric offerings to its portfolio that already includes gas-electric hybrid and compressed national gas. Utilimaster, a subsidiary of Spartan Motors, designs, develops and makes trucks and walk-in vans for use in the package delivery, one-way truck rental, bakery delivery, utility and linen/uniform rental industries.
Along with selling products to commercial vehicle dealers, the company markets directly to national accounts, which typically have more than 1,000 vehicles, and fleet accounts, which usually keep more than 100 vehicles. In 2011, Utilimaster’s sales of service and delivery vehicles reached $118.8 million, up from $96.2 million in 2010.
“We want to be innovative,” said John Marshall, Utilimaster senior vice president of sales and marketing. “We want to be a leader. Rather than having our clients come to us after the fact and say, ‘We wish you had this,’ we’re trying to be ahead of the pack.”
Indiana University’s Kerry Krutilla, associate professor in the School of Public and Environment Affairs in Bloomington, said green vehicles will not fade away but the market for them is extremely dynamic, dependent on the technology, the price of fuel and government policies. Still, those in the market are betting that the costs of the technology will decline, the price of fuel will continue to rise and concerns about dependency on oil will grow. Those elements in combination could turn around the profitability of these vehicles although every manufacturer is not guaranteed success.
“I would predict a larger market share than there is now,” Krutilla said, “but that doesn’t mean every alternative-fueled vehicle is going to be profitable.”
Utilimaster is partnering with other companies to add these alternative fuel vehicles to its catalog. In 2007, it began partnering with Azure Dynamics of Michigan to build the gas-electric hybrid truck. For the propane conversions, it was tapped by Wisconsin-based Bi-Phase Technologies, which is part of the Schwan Food Co., and for the all-electric vehicles, it has joined with Smith Electric Vehicles Corp., which has a U.S. operation in Missouri.
Propane conversions are done at both Spartan’s Charlotte, Mich., campus and Utilimaster’s Wakarusa operation as well as by Utilimaster’s field team, which can do the work at a customer’s facility anywhere in the country. To the partnership, Bi-Phase is bringing the technology and Utilimaster is providing the production capacity, dealer network and marketing capability to get the propane conversion to the market.
For the all-electric option, Smith and Utilimaster collaborated to develop the walk-in van using Smith’s Newton chassis platform and Utilimaster’s specially-designed body.
The research and development team in Wakarusa had to rethink the body to get it to not only fit onto the Smith chassis but also to make sure the entire vehicle had the applications and functionality the package delivery industry demands, said John Knudtson, Utilimaster vice president of product development. With the vehicle’s different voltage, the Wakarusa company had to adapt the entire electrical system to get features such as the windshield wipers, defroster and even the motor that squirts water onto the windshield to work. Also, to save power and extend the range of the electric walk-in van, Utilimaster switched the headlights, taillights and interior lights to LED technology.
Utilimaster is confident that alternative propulsion vehicles will maintain a place in the market and that it can create the trucks and walk-in vans to meet the shipping industry’s needs. The company has served major fleet customers for years, Knudtson explained, and it understands time is money.
“If you can show one of these package delivery companies a way to save 15 seconds a stop, you have their interest because that is money to them,” Knudtson said.
Merely offering alternative fuel delivery vehicles at a time when pump prices are rising is not enough, he said, outlining the reason why other vehicle manufacturers are not having success in the market. The cargo area needs to be easily accessed, doors must be big enough and in the proper place to appeal to package delivery companies.
One example of how a seemingly minor change can quickly translate into significant paybacks for fleet customers comes from UPS. Utilimaster installed keyless entry system on a majority of the company’s delivery vans, which shaved 6 seconds off each stop and saved UPS $70 million annually.
“Some electric vehicle manufacturers miss it,” Knudtson said. “They really don’t have a feeling for the market they’re targeting.”
However, the price tag on alternative fuel vehicles, in general, hinders the demand. Largely because of the technology involved, the dollar cost of green cars and trucks are higher than traditional gas- and diesel-powered vehicles, which can make the payback elusive for buyers, Krutilla said.
Incentives from the government as well as vehicle manufacturers provide an essential push but do not completely overcome of hurdle of the cost.
From a public policy point of view, the economic value of these vehicles includes the societal benefits of improved energy security, better local air quality and less harmful emission that contribute to global climate change. Looking at a diesel-electric hybrid medium-duty truck, Krutilla calculated that even if diesel fuel climbs to $4.10 a gallon, the difference between the cost of the conventional and diesel-electric truck would still need to drop by 30 percent before the benefit justifies the technology from that public perspective.
The stakes are higher from a private perspective because businesses tend to focus on the bottom line and tax obligations rather than societal gains. Using the $4.10 per gallon benchmark, Krutilla determined the difference between the conventional and diesel-electric truck would need to fall by more than 40 percent to justify the purchase and use of the technology without any financial incentives.
Last year, Utilimaster installed truck bodies on more than 150 all-electric cab chassis from Smith Electric Vehicles, Knudtson said. Production of the all-electric walk-in vans is scheduled to start in May and will be rotated onto the same line that builds vans on gas and diesel chassis.
Propane conversions are done on an as-needed basis.
Together, Knudtson expects the alternative fuel offerings of gas-electric hybrid, compressed natural gas, propane and all-electric to comprise up to 20 percent Utilimaster’s production in 2012. Despite the obstacles imposed by the technology, be believes green cars and trucks will become a permanent fixture on the roads.
“I predict that they will continue to gain momentum,” Knudtson said. “What’s going to work as far a hybrid, propane, CNG or electric, I’m not sure. That’s going to depend on the application and use. All have advantages and disadvantages but they’ll be around.”
-Marilyn Odendahl, Elkhart Truth