For a company such as Allison Transmission, which has been present in the U.S. for almost a century, the South American market offers enormous potential to increase sales and international market share. As one of the three largest producers of automatic transmission systems in the world, the company has tapped the developing markets of countries like Brazil to become the leader in its field. Unlike the U.S., Brazil has a very limited rail network, which results in logistics and transport companies using trucks and buses on the interstates. With the growth of industry, the demand for more efficient vehicles has been reflected in Allison’s South American sales.
“Brazil is a particularly interesting market,” explains Evaldo Oliveira, the director of the Latin American market region. “Apart from the growth in industries such as sugar and ethanol, the country is investing in ports and airports, where an increasing number of our systems can be applied.”
Allison designs, manufactures and markets fully automatic transmissions for commercial applications. The company has a comprehensive product portfolio to cover the diverse vocations and chassis types and sizes of commercial vehicles worldwide. The transmissions are used in construction, distribution, fire and emergency, refuse, airport service and hauling vehicles, as well as in buses, stationary off-highway equipment (including oil field equipment) and cranes. Allison is the only automatic transmission manufacturer that can offer a vast number of features to customize its products for different applications.
There is an important difference between Allison’s automatic transmissions and automated systems available on the market. The latter is a more traditional system that operates with the same components and on the same principles as a manual gearbox. Although the transmission occurs independently of the driver, the traction is interrupted. In the case of Allison’s transmission systems, the engine is linked directly to the gears, creating a sensitive mechanism, which can respond more efficiently to the level of acceleration, topography and requirements of the vehicle, without changing the traction of the wheels or losing speed.
Allison manufactures four different systems based on specific requirements. The 1000 Series is aimed at vehicles of up to 12 tons. The engine and gears are linked by a microprocessor providing precise, perfectly timed shifts regardless of road or load conditions. Standard features include lock-up operation in second-to fifth-range and helical gearing for reduced transmission noise. The 2000 Series transmission is designed for trucks and small buses of up to 15 tons. Adaptive technology ensures that optimum performance is maintained at all times. It also enables the transmission to compensate for variations in driving conditions, such as loads, drivers and traffic patterns. The 3000 and 4000 Series are flexible enough for a wide variety of heavy applications, of loads up to 44 and 81 tons respectively for vehicles that work on gradients and difficult conditions.
In Brazil the best selling systems are 2000 and 3000 Series for passenger buses, although the refuse and mining trucks sectors are also growing rapidly. Allison is constantly improving each of the lines and is currently on the fourth-generation design. In 2010 the company will launch the fifth generation of systems. “It is important that we never stop evolving,” says Oliveira.
Recent investments in hybrid systems are an important step forward as the company gears up for the future. The automatic transmission works with diesel and environmentally friendly engines, combining electric components for energy storage and reduced fuel consumption. Although hybrid systems are currently more widely sold in the U.S., constituting an investment of $62.8 million, the group anticipates their application to global markets.
Founded in 1915, Allison’s years of experience in the transmission industry have earned it a worldwide reputation for reliability. Today, Allison is present in 80 countries with over 1,500 distributor and dealer locations. In South America, Allison’s Customization Center is located in São Paulo, Brazil. The 3,500-square-meter facility receives engineering support and semi-assembled transmission systems directly from the U.S. The team of 30 staff calibrates and customizes the systems to satisfy the unique needs of the local market, utilizing new especially developed state-of-the-art electronic equipment.
Allison Transmission South America also has a sales office in Argentina. “Although the potential for commercial vehicles is bigger in Brazil, our largest Latin American market is Argentina,” says Oliveira. Laws in Buenos Aires require that buses have pneumatic suspension, rear engines and automatic transmission, a fact that has boosted sales in the capital. Allison also sells to Peru, Venezuela and Colombia.
Despite the sale of Allison Transmission by General Motors to a private equity group in the U.S. in 2008, the company continues to supply GM and Mercedes as well as Volkswagen, Scania and other industry giants. Allison had been a division of GM since it was founded in Brazil in 1976. The company was a pioneer in the market, installing automatic transmissions in military and commercial vehicles, and continues revolutionizing the market to date. The recent sale also positioned Allison for continued international growth.
BRAZIL AND BEYOND
“Brazil is in an especially interesting phase at the moment. With the soccer world cup in 2014 and Olympic Games in Rio de Janeiro in 2016, considerable investment in the public transport systems is planned,” Oliveira explains. The World Cup will take place in 12 Brazilian state capitals, all of which will require new buses for the high volume of tourists each will receive. The two international events were not only good news for the country’s economy but also for Allison, which estimates a sharp rise in sales. As well as increased public transport, the construction and petroleum industries are also set to benefit, which will boost business. “Next year, we will also have a general election in Brazil, so investment in construction and infrastructure will also have positive effect on Allison,” continues Oliveira.
Even the international financial crisis is no longer a threat to Allison’s progress. “We have our sights set on the light at the end of the tunnel, and have very positive opinions about our future in South America,” Oliveira says. “Every country is different, and Allison has the experience to secure its success in the future. In fact, the automatic transmission technology is an integrated part of Brazilian commercial vehicle culture, and while commonly misconstrued as the future of the modern engine, it is very much a reality today.