Europe Multi-Industry: Truck read-across from IAA Transportation - Day 2

Day 2 of IAA Transportation was dominated by the main themes flagged on Day 1, summarized by a generally constructive view on truck end markets in the US and to some extent Europe (more replacement led), in contrast to a more guarded medium-term view due to risks from rising Chinese competition in Europe and upcoming European CO2 regulation. We met with Daimler, Cellcentric, Knorr-Bremse, Sinotruk (booth tour) and Sany, and visited ZF impromptu. Chinese OEMs are still in the early stages of launching diesel and BEV products in Europe, but are very aware of the importance of building a service network. From an upfront cost perspective, some Chinese OEMs noted they can offer BEVs at a 30% to 50% discount versus Western OEMs, depending on whether they are assembled in Europe or exported from China. Unlike in China, these players will focus more on building service points and guaranteeing residual values in Europe. Autonomous driving is starting to see commercialization in 2027, but indust