July 21, 2014
The ongoing replacement of aging fleets have pushed heavy truck sales for much of the year, but Volvo President and CEO Olof Persson says the market has only now begun to grow.
Through June, the total North American retail market for heavy-duty trucks increased 10 percent to 122,989 units.
“I think one important fact with the North American market right now is that up until now or up until recently that’s been a replacement markets. So we haven’t seen any growth in the market,” Persson says looking back at the company’s first six months of 2014. “But now we do see a sort of an expansion also into new and expansion of fleets and so on and so forth. And that is of course much driven by the economy development in the market and therefore, it will have a lot to do with the GDP going forward in the North American and U.S. in particular, how that is developing and I think that will be a correlation back to as it normally is between GDP freight volumes and also expansion or contraction in the North America market and we will see how that develops.”
When it comes to the profitability in North America, Persson says there are two areas where the company focuses.
“One is to really making sure that we capture all the market business, based on our higher penetration on I-Shift and engines, but also and I think it’s important to remember is to provide a better service totally,” he says. “We have moved a lot in the North American market to work with Telematics in order to improve service offers to the customers and the whole area around the maintainability, service and business around that is something that we focus a lot around in order to improve an increased profitability in North America.”
The other area, Persson says, are the brand positions of Volvo and Mack trucks.
“We are addressing the Mack brand with a relaunch of the brand now. A rebranding. That is also important in order to connect that to the product features and that is also something we do,” he says.
Through June, 2014 deliveries of Mack trucks are up 24 percent in North America compared to last year. Deliveries of Volvo-branded trucks are up 44 percent in that same time frame.
Net order intake globally for Volvo is down more than 9,000 trucks during the first six months of 2014 compared to the same time frame in 2013. However, net sales are up more than 7,000 units in that same time.
Net sales in North America are up 17 percent in the first six months to 35,295 units; up from 30,192 last year.
Net order intake in North America is up 19 percent this year.