| Volvo Trucks, already a world leader, is expanding
north to the US, a little further south to Brazil and far to the east
to China. But how well has it been doing in its more established markets,
and most importantly what kind of plans does it have for the future? Peter
Wassberg, senior vice president strategic planning and business development
at Volvo Trucks put Nargess Shahmanesh-Banks in the picture.
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Peter Wassberg puts down
the sheer global success of Volvo Trucks to staying really
and truly global |
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“Volvo Trucks is pleased with its progress in Europe for the moment,”
says Wassberg. “It is at a good level and it looks like our progress
has been consistent this year. This is reflective to the overall situation.”
In the US the truck manufacturer has a situation whereby it is aiming
at meeting positive numbers within the next year or so. “We can
see that the market is perhaps not progressing in the way we would like
it to, of course,” admits Wassberg, “but it is heading in
a positive direction.”
American trucks are completely different to those made elsewhere. Wassberg
agrees. “It is a very different market and the requirements are
different accordingly.” He explains that the US does have some specific
needs that are not reflected in the European market. These requirements
are connected to the legal aspects. “For example, for long-distance
trucks you have the cargo length that has a certain legal requirement.
In Europe, on the other hand, you measure the complete vehicle combination.
This is reflected in the way we build our trucks.” However, according
to Wassberg, Volvo Trucks is able to accommodate these requirements. “We
feel that we can use quite a lot of our global platform to achieve these
aims.”
The company has strengthened its position in Latin America by introducing
a medium truck. “This medium truck can be used throughout the South
American region and we can broaden our programme to meet the market place,”
explains Wassberg. The medium market has always been popular in Brazil,
a market that has been strong for Volvo Trucks for a long time.
Volvo already has a medium programme in Europe, but these medium trucks
are specifically made for Brazil. “We have a FL programme for Europe
and for the rest of the world. This has been a base for our medium programme
for a long time,” says Wassberg. However, for Brazil this particular
truck does not meet the requirements, therefore Volvo has made a new platform
for the new model. In Brazil, the truck maker has had to use a very high
degree of local content, a legal requirement in the region.
Heading to the Far East, Volvo Trucks has signed an assembly joint venture
for China with China National Heavy Truck Corporation. “This is
the next strategic area for us,” says Wassberg. Within Asia in general,
he explains, China is developing in a very rapid way. “The market
there is huge and we feel that we have a good platform there to build
on.” However, he admits that there are always obstacles when you
enter new markets.
Main competitors in the region are hard to pinpoint. “It depends
on how you look at it,” explains Wassberg. Volvo Trucks is the biggest
western company in China today, although there are four Japanese manufacturers
ahead of the truck maker in that market.
In China, Volvo will probably use a broader product line in time, but
for the time being it has to enter with some specific products. “The
legal requirements in China apply well to the products we already have,”
says Wassberg.
Production from concept to delivery for the truck maker’s vehicles
depends on the product launched, explains Wassberg. “The latest
product we launched was the FH16, which took approximately five years
from start point to the delivery time. In general, it takes around this
time to produce a new vehicle from idea to launch.”
When it comes to supplier choice, Wassberg says, Volvo Trucks follows
certain policies that are written for its partner 3P. This involves being
regulated both from an environmental point of view and from the aspect
of local content. There are many rules for purchasing, admits Wassberg.
“Within Volvo Group, Volvo Trucks uses 3P for purchasing, but we
also have Volvo Powertrain, who is our supplier for all powertrain.”
In terms of competitors, Wassberg admits that globally, it is not so easy
to say. “We have many competitors that are very strong in many areas,
or in certain regions. However, overall we are amongst the best worldwide.”
The company is concerned about environmental issues, admits Wassberg.
“However, the tricky part with trucks using any other fuel for power
is the need for high torque and high horsepower.”. Therefore, he
admits, this can limit the possibilities. “However, we believe with
the new regulations, we have the capacity to satisfy Euro emission levels
4 or 5 and coming US regulations. When it comes down to legal requirements,
we always have to meet them, but additionally, we try to exceed them if
possible.”
There has been some debate as to the extensive use of in-car telematics
in the truck industry and the creation of a ‘Big Brother’
scenario. Wassberg looks at the positive side of using such technology.
“Telematics is simply a tool for the customer to be more efficient
in his operation. We see this as a beneficial part for everyone involved
and a good tool for the future.”
Asked about future trends, Wassberg replies: “What we know is that
the need for transportation will increase and the major part of this will
involve trucks. A new market to enter, therefore, would be with heavier
trucks. Furthermore, the consolidation among both manufacturers and transport
industry will continue.”
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