One example of vertical integration at TMC: Cummins’ bright-red display of its X15 integrated powertrain.
Once upon a time, there were three big truck engine makers in the U.S.: Caterpillar, Cummins, and Detroit. A couple of truck makers, like Mack and Volvo, offered their own engines. You ordered a truck and spec’ed the engine you wanted, which transmission, which axles, and so on, and they typically were all from different companies.
Then along came Volvo Trucks, with its own engines and transmissions, which brought to the U.S. the concept of vertical integration, common in Europe.
That journey toward vertical integration struck me after coming home from the American Trucking Associations’ Technology & Maintenance Council meeting in Nashville last month.
In Europe, buying a heavy truck was (and is), more like buying a passenger car. You have a pick of a few packages, with major components such as engines and transmissions made by the OE. The dealer probably takes care of all your maintenance.
But in 1999, Marc Gustafson, then president and CEO of Volvo Trucks North America, told members of the Heavy Duty Manufacturers Association that big changes were coming in the way we spec, buy and sell trucks.
While these changes wouldn’t go as far as European-style vertical integration, Gustafson said, he predicted a more modular approach. The industry couldn’t afford to have hundreds of products to spec and hundreds of companies to deal with, he explained.
Customers would still have choices, Gustafson predicted, but the choices would be between highly engineered product packages and systems, not individual bolt-on products.
In addition to the increased globalization of the truck market, another big trend driving virtual integration was emissions regulations and the need for fuel efficiency. Engineers discovered that a vertically integrated powertrain could be designed as a single system for the best efficiency.
In the 25 years since then, the North American truck market has inched more and more toward vertical integration. As we moved into the early 2010s, OEMs pushed vertical integration even more. In 2012, I reported on the vertical integration trend that was apparent based on announcements at the Mid-America Trucking Show. “Downspeeding” was a new concept.
Volvo has been a leader in the move toward vertical integration in heavy-duty trucks.
Vertical Integration Today
And here we are in 2025, and I come back from another big trucking event again struck by vertical integration.
Perhaps the most striking example at TMC in Nashville was Cummins.
Back in the 2010s, there were questions about whether Cummins could continue to succeed in a vertically integrated truck-making world. (Caterpillar had been pushed out of the truck market already by the daunting 2010 emissions regulations.)
But instead, Cummins has adapted and thrived. It has moved into electrification, created new engines for alternative fuels, and developed its own vertically integrated powertrain systems.
At TMC, the company’s booth was dominated by a highly visible all-red powertrain display, showcasing the latest X15 engine, aftertreatment, transmission, axles, and so on.
“It was a journey of 10 years to get us here, where we finally have the whole powertrain,” said Cummins’ Mario Sanchez-Lara in an interview walk-around with HDT Executive Editor Jack Roberts at TMC. Integrating the powertrain allows it to extract the most efficiency out of the engine, he explained.
The journey included Cummins’ 2017 50/50 joint venture with Eaton, Eaton Cummins Automated Transmission Technologies, and its 2022 acquisition of Meritor that brought in axles and other necessary pieces of the puzzle.
Sanchez-Lara said the Cummins integrated powertrain doesn’t mean the company is choosing everything for the customer, something some customers fear about this integration trend. There are plenty of options in gearsets, aftertreatment, engine ratings, and so on that make it suitable for a wide range of applications, he explained.
Vertical Integration: Not Just for Powertrains
Vertical integration is going beyond trucks, too.
Wabash, showing off its trailers as a service offering and latest trailer technology at TMC, also talked about vertical integration it’s using with its panels and floor in its latest trailer, including the fact that it’s heavily using domestic products.
Vertical integration even becomes a factor within components themselves.
ConMet, for instance, was celebrating 30 years of its PreSet wheel-end technology at TMC. It also touts the benefits of vertical integration for its product, noting that all critical components, including hub castings, bearings, seals, spindle nuts, and spacers, are designed and engineered in-house to guarantee compatibility and reliability throughout the entire system.
And there was another sign of how the industry is inching more toward European-style truck ordering along with vertical integration.
In unveiling its all-new Volvo VNR regional truck at TMC, Volvo said it would be accompanied by a new spec’ing process with new packaging options for powertrain and safety. Company officials said this was an industry first that simplifies and optimizes the configuration and ordering process and streamlines assembly operations.
More TMC Takeaways coming soon: Everything “as a service” and smart everything
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