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Volvo building share in hot truck market

Posted: May 18, 2018 by John G. Smith

Per Carlsson chats with an America’s Road Team captain, in the cab of a VNL760 Volvo has donated to the cause.

NEWPORT, R.I. – Per Carlsson has been here before.

The global senior vice-president of Volvo Trucks’ strategy and transformation office was president of Volvo Trucks North America from 2008-09, and now he finds himself serving as interim president to fill a role vacated by Goran Nyberg, who has taken a senior position at Volkswagen’s MAN Truck and Bus business unit.

Once again, Carlsson is managing the manufacturer’s day-to-day business. “It’s focusing on selling trucks and delivering trucks and supporting the customers,” he says. “I’m not here for doing any big changes.”

But Carlsson is filling the role at a particularly busy time, with truck sales hotter than they’ve been in years. The business environment is not only strong in North America, but also Latin America and Europe. That hasn’t happened since 2007. Usually, when one global truck market is up, another tends to be down.

Net orders in the first quarter of this year, compared to 2017, were up 107% in North America, 57% in Latin America, and 10% in Europe. Truck deliveries surged 114% here, 82% in Latin America, and 9% in Europe. To put the numbers in perspective, Volvo recorded 5,934 North American truck orders in January alone, marking the company’s largest monthly total in history.

Market shares are growing, too.

“We have a very positive improvement in Canada. We have regained a lot of share,” Carlsson told a business symposium for customers and dealers. Volvo’s reported 14.2% share of Canadian truck sales is up substantially from the 10.6% in 2017 and 12.6% in 2016. Across NAFTA countries, the market share is at 10.1%.

Lead times

One of the biggest challenges is building the equipment fast enough.

“We have longer lead times than we would want,” Carlsson admits. Many orders placed today wouldn’t be filled before the end of the year.

Eric Starks, chairman and CEO of FTR, says North America’s truck buyers are typically waiting seven to eight months before ordered trucks are delivered. “This is where the communication between the OE and yourself is a big deal,” he said. “I don’t see this number coming down substantially as we move through the summer.”

For its part, Volvo has increased the pace of production, and is now focused exclusively on building its recently renewed product lines such as the VNR, VNL, and VNX.

“We still have more room in our assembly plant to produce more trucks,” Carlsson said. But like other original equipment manufacturers, the company is facing other bottlenecks in the supply chain.

“We have several suppliers that are on the capacity limit,” he explained of the all-important components. “We are working to resolve several issues.”

The future

In the midst of it all, Volvo Trucks also has to plan for the future – something that’s expected to be increasingly electrified.

In Europe, for example, the company recently unveiled electric FL and FE trucks, building on electrification work that first began in 2005-06, when the focus was on buses. “This is an exciting area, and we can see strong signs from the customer perspective, and also from society,” Carlsson said. “Electrification will be a part, more or less, of every market in the world.”

Even the way new products are introduced is expected to change.

The development of new products will become increasingly transparent, explained president and CEO Martin Lundstedt. Rather than simply unveiling a new truck every four to five years, “it will be an iteration process in the future, where we are actually introducing new pieces step by step.”

Research and development will also increasingly rely on local and regional competence.

“In a fast-moving world, we need to move much more quickly,” he said, referring to the importance of a “strong, decentralized” business mandate.

As new truck sales surge, there is also an eye to what happens as the trucks of every variety age.

“It’s our belief that the used truck market will continue to be strong, there will be a lot of used trucks available,” Carlsson says. But Volvo is also exploring ways to further refine the used truck business. A successful business, after all, looks at the entire product lifecycle.


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