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Volvo Trucks: the story

Demand for trucks -- be it heavy, medium or light -- is on the increase worldwide, but the secret to world success is to be both flexible in terms of product and ridged, perhaps, in terms of production. With this in mind, Volvo Trucks has reached a fine balance, as Nargess Shahmanesh-Banks discovered.

The Volvo FH16 is the truck maker's most powerful truck ever
The Volvo NH is a front-engine truck developed for the South American market

Deliveries of trucks from the Volvo Group – Volvo, Renault and Mack Trucks – according to Volvo reports published in November, have been on a decline this year by 4 per cent compared to the year-earlier period. Mack Trucks did particularly badly with figures showing a decline of around 26 per cent while Renault Trucks saw a downfall of 8 per cent. However, the Volvo Trucks brand itself has seen an increase of 8 per cent.

On a 12 month rolling basis, total order bookings for the truck brands was unchanged compared with the preceding year, the report suggests, although Europe was down by 3 per cent lower and the US by 4 per cent.

“The European heavy truck market continues to be stable at a favourable level,” explains Leif Johansson, CEO and president of the Volvo Group. However, he admits that in the US, there is still a low demand for Volvo Trucks without any clear signs of a significant improvement.

According to the same report, deliveries for Mack Trucks, through October came to around 15,551 units – this is down by 26 per cent from the year-earlier period. Dealers are reporting that some customers who had purchased trucks with non-EPA 2002 compliant engines in 2003 were moving back to Mack's EPA 2002 compliant products for their 2004 purchase programmes.

Deliveries for Renault Trucks from January through to October came to 48,367, the report suggests, down by 8 per cent compared with the corresponding period in the preceding year. However, sales in Spain rose by 4 per cent, Austria saw an increase of 22 per cent and Germany was up by 6 per cent. Eastern European sales also saw an increase of 13 per cent, with 3,379 units. In Poland, 1,157 vehicles have been sold since the beginning of 2003, an increase of 21 per cent.

Good news for the company came in the medium-heavy segment, where sales of the Renault Midlum remained at the same level as in 2002, probably due to the sustained interest from customers for this vehicle. The deliveries of Renault Master and Renault Magnum – both ends of the broad Renault Trucks offering – are also holding up well.

Finally, according to the report, Volvo Trucks saw an increase in its deliveries during the period January to October by 8 per cent. All regions saw higher sales figures compared with the year-earlier period. Claes Claeson, media relation's manager at Volvo Truck Corporation says that overall the market in Europe and the US for Volvo Trucks remains strong.

In a statement made by Volvo in 2000, the company stated that in the new millennium, demands on trucks and truck transport are expected to increase. Although good transport efficiency and low transport costs remain the prime objectives, safety, ergonomics, comfort and environmental issues are all high-priority considerations. Plus the emergence of integrated telematic systems as well increased co-operation between different forms of transportation (including trucks, railways, shipping and air), have resulted in better transport all-round.

The truck maker sees diesel engine trucks continuing to be the most flexible and efficient transport tool, but it does admit that new engine types will complement the diesel engine for special tasks.

Stable markets

Iran is now the third largest single market for Volvo Trucks after the US and the UK. Deliveries amount to 1,364 (+110 per cent), which reflects the successful partnership for truck assembly that Volvo Trucks has with Saipa Diesel in Tehran. In fact deliveries in the Asian region have risen, according to Volvo reports, steadily during the year, the report suggest, due primarily to very strong demand for the Volvo FH and Volvo FM in Iran.

Growing markets

Volvo Trucks has operated in Brazil for more than 25 years and the factory in Curitiba manufactures both cabs and engines for trucks. In addition, the plant also builds Volvo buses. The company is also a market leader in Brazil in the commercial vehicle segment above 16 tonnes. The total market amounts to about 14,000 heavy trucks a year.

Volvo’s investment in the new heavy truck range in South America is around $35 million (€29 million). This is part of the $100 million (€84 million) that was previously earmarked for investment in Brazil. Its strong investment in this country is mainly due to the fact that it is the engine of the economy in South America explains Claeson.

The Brazilian built Volvo NH – a conventional front-engined truck first revealed in 1998 and relaunched in Brazil in October – was developed solely for the South American market. It is an important model for the truck maker in that it is not only a very fine carrier for this market specifically, but it is also the ninth introduction from Volvo Trucks in slightly more than three years. Its launch marks the completion of the global product renewal.

“The Volvo NH is only for South America,” says Claeson. “With this new model our entire global product range has been renewed.”

The new Volvo VM is the company’s first medium duty truck model to be developed and produced outside Europe. The Volvo NH, FH and FM have already been in production at the factory in Curitiba for a number of years.

Most importantly, the VM has been developed to meet the South American customers’ demand for a medium duty truck for regional distribution and urban operations. The smaller truck is delivered with a fully built body directly from the factory in Curitiba. About 75 to 80 per cent of the components in the new model are made locally in Brazil. The new car comes with a choice of two engines producing 210 and 240 hp respectively. Some components in the VM come from Renault Truck’s medium-range model, the Midlum.

Volvo expects to sell around 1,500 VM trucks next year, which works out to about 10 per cent of the market for medium trucks in South America. Investment in the new model came to $35 million (€29 million) and the aim is to secure a 10 per cent of the market for medium trucks within just one year.

The introduction of the new FH and FM models in South America marks the total renewal of the entire Volvo product range in the region.

“Today we have a highly competitive product range in every part of the world,” says Jorma Halonen, president and CEO of Volvo Trucks. “Every product launch in recent years has prompted a significant increase in demand for our products and we have consistently expanded our market shares on most markets around the world.”

New markets

In terms of global strategy, Claeson says that without being too specific, Asia is one of the regions that Volvo Trucks is planning to expand in, with China perhaps becoming one of the key markets.

As with other products, the market for heavy trucks in China has been on a rapid increase in the last few years. The strong economic growth and the massive investments in the Chinese infrastructure have been boosting the transport demand, which in turn has increased demand for all-size trucks.

In a deal worth $72 million (€60 million), Volvo Trucks signed a 50/50 joint venture agreement last June with China National Heavy Truck Corporation, CNHTC, for the production of trucks. Volvo Trucks has some experience in working in China when it first entered the market in 1991 with a market and service support organisation. The development has been very strong with deliveries increasing to above 1,000 trucks in 2002.

“We are the biggest western company in China today, from the imported brands. There are four Japanese manufacturers ahead of us there,” says Claeson.

The total market for heavy trucks above 16 tonnes is currently around 50,000 in China. This class is expected to grow to 80,000 or possibly 100,000 trucks in six to seven year which is where Volvo hopes to profit.

The 50/50 joint venture company, Jinan Huawo Truck Corporation, has plans for production by the end of 2003 at CNHTC’s premises in Jinan, in the Shandong province of China. The initial capacity is 2,000 trucks per year. Volvo’s product range in China will include the FL, FM9 and FM12. The aim is to increase volumes to 10,000 trucks per year by 2010 with a high level of local integration.

“China is a key market for the Volvo Group and we have been working systematically to establish all our business areas in China,” says Johansson. “It is pleasant to certify that this joint venture makes Volvo Trucks the first western truck manufacturer with an industrial platform for heavy trucks in China,” he adds.

China’s CNHTC has a very strong foothold in China with a market leading position in the heavy truck segment and an annual volume of 25,000 units forecasted for 2003.

This agreement is an important milestone for Volvo Trucks,” explains Halonen. “The Chinese market has a fantastic potential and CNHTC is a very strong partner. An industrial platform is essential for us to continue our growth in this dynamic market.”

Future markets

Volvo Trucks has said it is ready to make significant investments over the next three years to create additional production capacity, increase local content and improve its sales and service network in India. The truck manufacturer has already spent around 3 billion rupees ($65.4 million) in its Hoskote plant and in its dealer network. Volvo executives are confident the market for heavy-duty tractor/trailers in India will grow steadily over the next few years from about 10 per cent of total truck sales to 15 per cent, and they want to grab a 20 per cent share of the business.

New product range

The Volvo FH16 is the truck maker's most powerful truck ever. It was launched in the autumn at the European Road Transport Show at RAI in Amsterdam. Among its features are an entirely new 16 litre engine, producing 610 hp, an exclusive interior and bodywork, and advanced systems for active safety.

The FH16 is targeted at the heaviest segment. The new model is based on the FH Series launched in autumn 2001, but it also features a host of new technology that is entirely unique to the Volvo FH16.

“The FH16 is a truck for the toughest of all assignments,” boasts Halonen. “However, I am sure we will see higher gross combination weights and increased rig lengths in the future in the bid to streamline road-bound transportation in Europe – and that’s when powerful trucks will come into their own.”

At the heart of the Volvo FH16 is the entirely newly developed D16C engine. It is an in-line six-cylinder turbocharged diesel engine with a displacement of 16.1 litres, available in a choice of two power outputs: 610 and 550 hp. Maximum torque is a massive 2,800 and 2,500 Nm respectively, available between 950 and 1,500 rpm. The D16C can also be equipped with Volvo’s VEB engine brake, which provides up to 380 kW of braking effect.

The D16C is a modern engine that shares the same basic design parameters as the D9A engine first seen in 2001. It is lightweight, quiet and fuel-efficient, and approved to Euro 3 standard.

There are three different cab sizes to choose between in this model: sleeper, Globetrotter and finally Globetrotter XL, which is the largest alternative. On the outside, there are details that clearly show that this is a Volvo FH16, such as the chrome trim in the grille, on the rear-view mirror housings and on the wind deflector. The FH16 logo is repeated on the door handles and even the illuminated sign on the Globetrotter cabs displays the truck’s identity. The cab interior boasts fresh new materials and colours in the upholstery and instrument panel, all helping to create a comfortable and aesthetically pleasing workplace.

All versions of the Volvo FH and Volvo FM series can be equipped with a number of safety systems that help establish their market-leading safety specification. The ACC active cruise control uses Doppler radar to maintain a safe distance behind the vehicle in front automatically. The ESP electronic brake stabilisation system that prevents skidding and rollover in critical situations is now available on 4x2, 6x2 and 6x4 tractors. Trucks with Volvo’s EBS electronically controlled braking system also feature Hill Start Aid to assist starts on steep gradients.

Production time differs from model to model. “The recent flagship Volvo FH16 was developed in five years or so if you count the project time. It’s evolution and not everything in developing a new truck model is linear,” explains Claeson. “Without knowing I believe that the car side is developed on a much more straightforward way,” he adds.

Also shown at the show was the new FM12. It has a 460 hp D12D engine – previously only available in the Volvo FH – which can broadens its operational range. In combination with the new engine, there is also an updated version of the Powertronic automatic transmission. It has been reinforced to handle higher torque and it has a new gear lever carrier that is integrated in the driver’s seat. The FM is now available with engines of 9 and 12 litres, with power outputs from 260 to 460 hp.

In terms of future models, however, “we never reveal or discuss any future products or plans for competitive reasons,” says Claeson.

Safety

Every year, around 4,000 people die in frontal collisions between cars and trucks on Europe’s roads. To counteract this, Volvo Trucks is demanding a change in legislation that will make it possible to build trucks with an effective deformation zone at the front.

“We cannot simply sit back and watch while 800 or 900 people a year lose their lives entirely unnecessarily. A great deal of suffering could also be avoided,” said Halonen at a press conference in conjunction with the European Road Transport Show in Amsterdam.

Since August this year, a front under-run protection system, that prevents cars from becoming wedged under the front of trucks, is mandatory for all new trucks. This improves the chances for the passengers in the car to survive a frontal collision with a relative speed of 60 km/h.

However, Halonen thinks we should go even further in enforcing legislation. According to him, if trucks were equipped with a 60 cm long extra deformation zone at the front, safety would be further improved even at relatively high speeds. It would then be possible for the passengers to survive a collision at higher speed. However, the bad news is that it is not possible to build this type of deformation zone into a truck with the current European vehicle weight and length regulations, without reducing the vehicle’s load capacity by a corresponding amount. This is a consideration that forces haulage companies to choose between increased safety and unimpaired load capacity.

“Quickly implemented, standardised legislation on vehicle length and weight throughout Europe is the only way to make a longer deformation zone possible,” says Halonen. “This is not going to happen on a voluntary basis, because no haulage company can afford to reduce load capacity.”

Volvo Trucks has made some progress by introducing an integrated 20 cm deformation zone in the standard vehicle on all newer Volvo FH and Volvo FM models. Further solutions already exist in concept vehicles.

Green issues

At the European Road Transport Show, Volvo showed that trucks can also care for the environment, to an extent. The fuel-saving concept is called the Fuel Package, an option on the FH and FM ranges. This improves aerodynamics and thus cuts fuel consumption. New air deflectors on the roof and cab sides along with aerodynamic hubcaps that reduce turbulence around the wheels serve to minimise overall fuel consumption. The package also includes more intelligent control of the air compressor, cutting power losses.

420 and 460 hp versions of the Volvo FH12 are available with the EconomyPower package, whereby the engine's maximum torque increases by 200 Nm in top gear. This cuts fuel consumption since the engine can handle steeper gradients in top gear. EconomyPower is sold in combination with the I-Shift automatic gearshifting system.

Continuing on a green theme, Volvo Trucks North America scored top marks at this year’s Challenge Bibendum with the truck maker’s VN780 technology truck using the least energy and receiving the highest rating in its class during a test of energy consumption simulating overnight idling. A second Volvo VN displayed advanced emissions control technologies for heavy-duty diesels.

Reducing truck engine idling (when the engine is running, but the truck is not being driven) has important economic and environmental benefits. The average heavy-duty truck consumes one gallon of diesel per hour while idling, which adds up to an estimated 2,200 gallons per year per truck. Decreased idling is an important component in reducing overall heavy-duty vehicle emissions. It also allows truck fleets and owner operators to reduce operating costs and unnecessary wear on their trucks by reducing the number of hours their engines operate. Noise from idling can also be an issue in populated areas.

The VN780 Tech Truck demonstrates how drivers can use other methods to produce the energy needed to power their on-board amenities, including shore power (electricity from an outside source) and an efficient onboard generator. Indeed, the VN780 Tech Truck has a number of advanced features to make a driver’s life more comfortable and productive, during their non-driving work and resting time.

One example of these amenities is an automated climate-control system with the ability to run a heating, ventilation and air conditioning (HVAC) system on AC electrical power. The truck also has shower, tub and sink, plus RV-style toilet facilities. All of these features are intended to make the driver as well rested as possible for driving. An onboard electric water heater produces hot water for the system. The electrical system also provides power for other amenities, such as a refrigerator, onboard computer with Wi-Fi wireless internet connection, in-dash DVD, and TV/VCR hook-ups.

Also at Bibendum was Volvo's VN daycab testing potential EPA 2007/2010 emissions control technologies. This truck, which operates in daily service in a customer's fleet, is equipped with a urea injection selective catalytic reduction (SCR) system, a diesel particulate filter and runs on ultra-low sulphur diesel.

On the whole Volvo Trucks can be seen as a global winner, entering territories like the US, where regulations are strict and demanding on truck manufacturers, or uncertain regions like China. Most importantly, though, it has kept up with global trends and the main future one, according to Claeson, is consolidation both among manufacturers and transport companies. “Volvo is today the only true global player in the truck industry. We are using basically the same platform in all our markets across the world.” Perhaps this is the key to success.


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