Volvo Trucks Are Tired of Global Market Development is Uneven
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Recently, Volvo Group announced the development plan for its truck business from 2013 to 2015. The plan sets 20 strategic goals, including improving the gross profit of trucks in various regions, reducing the proportion of the actual sales cost of products to the total cost, lowering research and development costs, developing information technology, and optimizing brand assets.
As the world's second-largest commercial vehicle manufacturer, the Volvo Group has grown into four major truck brands: Mark Trucks, Renault Trucks, UD Trucks, and Volvo Trucks; the key development areas include South America, North America, and Europe. , Middle East, Africa and Asia Pacific. According to Volvo Group President and CEO Olof Persson, the Volvo Group will further stimulate the Volvo Group's potential with a strong brand portfolio, highly competitive products and a new organizational structure. However, from the perspective of the recent global sales of the Volvo truck business, although North America is thriving, Europe and South America are far from satisfactory, and Asia is still in its infancy. To achieve the Group's strategic goals, Volvo Trucks still needs to work hard.
Local market "very injured"
With the weakening economy in the euro zone, major commercial vehicle manufacturers have begun to live in tights, Volvo is no exception. According to Rove Payson, as the demand for heavy commercial vehicles in the southern European market weakens, this trend may spread throughout Europe. As of October 2012, sales of Volvo Trucks in the local market have shrunk by nearly 20%. It is understood that before this, the Volvo Group had predicted that its sales volume of heavy trucks in the European market in 2012 was 242,400 units; however, sales volume is expected to be reduced to 230,000 units in recent days.
South American Market "Difficulties"
Brazil is a hotly contested place for multinational commercial vehicle manufacturers in South America. Recently, Volvo Group had to lay off 208 employees in the Parana plant in response to the decline in sales in the Brazilian market.
However, for the Volvo Group, the difficulties in the Brazilian market are more than that. On the one hand, some analysts predict that with the economic slowdown in Brazil, the GDP growth rate in 2012 can only be maintained at 2.5%; on the other hand, starting from January 1, 2012, Brazil is determined to tackle increasingly serious air pollution. The National Motor Vehicle Air Pollution Control Plan was launched, and the focus of the treatment was on heavy-duty commercial vehicles. The emission standards adopted were equivalent to the latest European and American emission standards. It is understood that Brazil hopes to increase the supply of low-polluting fuel, strengthen air pollution plans in all states and municipalities, and conduct compulsory inspections of new and old heavy-duty vehicle pollutant emissions to improve air quality.
The economic slowdown and the implementation of new emission regulations have seriously slowed down the development of Volvo Trucks' business in Brazil.
The North American market has become a bright spot Although in the domestic market, Europe and the strong market, Brazil has been “disconnectedâ€, but the Volvo Group has maintained a continuous increase in sales in the North American market. Among them, the first quarter of this year, the most eye-catching performance - heavy commercial vehicle sales reached 128,000.
Not only that, the sales target set by the Volvo Group also shows its confidence in the North American market. Based on sales of 216,000 trucks in 2011, the Volvo Group set a target of selling 250,000 vehicles in the North American market in 2012. .
However, in recent years, the market demand for flat-head trucks in the North American market has been declining year by year, and the cost of supervision has increased year by year. For this reason, the Volvo Group had to make adjustments to suspend production of the Unidy flathead truck in the North American market. The heavy responsibility of the North American market has also fallen on the mark truck brand that is good at long trucks.
Emerging market troubles are mostly based on the three-year development strategy announced by the Volvo Group. Volvo will cut the cost of mature markets and turn to support emerging markets. However, it re-started in the Thai and Iraqi markets, encountered strong domestic rivals in the Indian market, and dropped its product line in the Chinese market... These conditions are clearly too short for the development time of the Volvo Three-Year Plan.
Volvo Group in Thailand market, mainly rely on You Di brand "strength". Volvo Trucks, which once left the Thai market three years ago, expects to regain 15% of the market share of heavy-duty commercial vehicles in 2012 from the Unid brand that meets the tastes of the Asian market, and set the sales of 12,000 trucks in 2012. aims. At present, the number of trucks in the Thai market has reached 7,000, but mainly used cars. In response, Volvo Group invested 4 billion baht (about 130 million US dollars) to assemble trucks in Thailand with an annual production capacity of 20,000 units. 80% of the products produced are Yudi brand trucks and 20% are Volvo brand trucks. Jacques Michel, president of Volvo Group Thailand, expressed strong confidence in this. However, whether its vision can be achieved still requires market inspection.
In India, the heavy-duty truck market is undoubtedly a challenge for Volvo. For an extremely strong market for a local commercial vehicle manufacturer in India, even more powerful transnational commercial vehicle manufacturers have come to India to appear “unfamousâ€. At present, Volvo trucks account for 11% of the commercial vehicle market in India. Among them, light commercial vehicles (5 tons -12 tons) is the main force, the market share of 31%; and heavy commercial vehicles accounted for only 3.4%. In response, Volvo Group put forward the goal of "upgrading the market share of heavy commercial vehicles in India to 15% by 2015". In order to achieve this goal, Volvo Group cooperates with local Indian company Eicher, focusing on the 25- to 49-ton medium- and heavy-duty truck market, with Tata's Prima and Ultra series trucks, and Ashcroft. The U Series trucks of the (Ashok Leyland) car compete directly. However, from the recent sales of the Airer commercial vehicle business, the results were far from satisfactory. In September 2012, Acher sold a total of 3,150 commercial vehicles, a decrease of 32% compared to the same period last year. As early as in 2005, Ache Motors wanted to enter the heavy commercial vehicle market, but the result was not satisfactory. Perhaps Volvo teamed up with Eicher to enter the heavy commercial vehicle market in India. The challenge is greater than the opportunity.
In the Iraqi market, Volvo launched Scania's "close combat." In post-war Iraq, the vigorously promoted infrastructure has shown strong demand for commercial vehicles. Stefan Soenchen, vice president of Volvo Truck North Africa and Middle East Business, recently stated that the demand for heavy commercial vehicles in the Iraqi market is 1,500-2,000 vehicles, with emphasis on infrastructure such as roads, electricity, water, and waste transportation. All are government procurement. In response, the Volvo Group announced plans to start CKD trucks in Iraq on April 1, 2013. The assembly plant is located at Al Iskanderiyah, an industrial center 60 kilometers south of Baghdad. However, Scania, who is also a Swedish commercial vehicle manufacturer, has already taken the first step. It has established a firm mining and supply relationship with the local government and multinational oil companies in Alscandia, plus 20,000 people in possession. The foundation and the "rapid expansion" demand by Gustaf Sundell, general manager of Scania's Iraqi district, will be fierce for Volvo and Scania.
In the Chinese market, the Volvo Group chose to go lower. It is understood that Volvo Group plans to bet on a joint venture company, Dongfeng Nissan Diesel (DND), to produce more targeted products for the Chinese market. At present, the market share of Dongfeng Nissan Diesel (DND) in the Chinese market is minimal, coupled with the low rate of localization and high prices, and it is impossible to expand sales. Under such circumstances, it may be Volvo's upset to choose to take the low-end route.