Changing Transportation Landscape Brightens Prospects Of Volvo Trucks

By T Murrali:

Global sales and registration of new trucks, from its nadir of 15.9 million in 2009, owing to the widespread financial crisis, recovered to 25.95 million in 2017, growing six percent between 2016 and 2017. The latest scenario seems similar for most of the players. However, the key differentiator is performance of certain markets for certain players like Volvo Trucks, which did well globally and sees bright prospects for growth in the emerging markets, like China and India.
During a recent visit to India, Heléne Mellquist, Senior Vice President of Volvo Trucks Sales Area International, shared with AutoParts Asia her views about the challenges and opportunities in the commercial vehicle industry. Responsible for the Volvo Trucks business in Asia-Oceania, Africa and the Middle East, Mellquist underlined the potential of the region which had 25 percent growth in sales during 2016-17.
“At Volvo Trucks International we have a broad geographic reach and thus a very diverse set of markets. Some markets, like Australia, are extremely mature while in Africa the commercial vehicle industry is still in its infancy, but promising,” Mellquist said. While discussing some of the challenges common to the different markets that she oversees, she highlighted geopolitical risks, commodity prices and the new technologies like automation and electromobility that define the future of the automotive industry.
Mellquist, however, remains optimistic about the industry’s future, particularly in Asia. “The emerging markets, mainly China and India, show a lot of potential. This is owing to two factors. The first is population growth and increasing consumption. Within Volvo Trucks International we are talking about more than 120 countries and 5.7 billion people. As economic growth translates into material wealth for more people, we expect a big increase in consumption and demand for logistics. The second factor is greater awareness of Total Cost of Ownership (TCO) and productivity. Increasingly we see that customers are more concerned about the total cost of a vehicle in its entire lifecycle than the sticker price. This creates many opportunities for premium players like Volvo Trucks that can provide improved uptime, quality and superior fuel economy,” she said.
In 2017 Volvo Trucks International delivered 20,000 units, a big jump from 16,000 units in 2016. “We are growing and today we are at the peak of the business cycle,” she said.

Changing Landscape

Logistics industry the world over is changing. While the logistics cost is about six to seven percent of GDP in the developed markets, in India it is still 12-13 percent. Therefore, the scope for improvement is very high. Asked how Volvo Truck is leveraging this emerging opportunity, Mellquist said, she was in India recently and met customers in different transportation segments. “We visited a couple of customers in Hyderabad and was happy to see that our trucks have been delivering real productivity improvements. We also saw some irrigation projects where the safety, quality and durability of our trucks have ensured that operations never came to a standstill,” she said.
“We are in a business of trust. Customers’ trust is the finest form of acknowledgement. Every day, customers across the globe choose to purchase our vehicles and service solutions to help them succeed in their business. They trust us to keep our promise and always be there for them. Our customers understand that we make business sense for them by being partners,” she added.

New Avenues

Volvo Trucks has been historically strong in the mining segment in India. The company wants to expand to
new areas such as construction and long-haul. Mellquist believes that Volvo’s wide and customisable offerings are very advantageous for that.
About the changes in Indian transportation industry with the introduction of GST and e-way bill, Mellquist said these changes will have a positive impact on the logistics industry and provide Volvo Trucks with new growth opportunities. In addition to GST, she mentioned infrastructure investment as a driver of growth for the commercial vehicle industry.
“Better infrastructure means greater flow of goods and services. As road transport becomes faster and more efficient we foresee greater demand for high quality trucks,” she said.About future product introductions, Mellquist said, “Today we have a range of solutions for mining, quarry, ODC (over-dimensional cargo) and road construction in India. It’s a growing set of solutions, and we would keep adding to it.”
Volvo currently offers the Volvo FMX and Volvo FM models in India. The Volvo FMX 8X4 is for mining operations, FM 6X4 is for heavy haulage applications while FM 4X2 is for long-haul operations.
The Volvo FH series, which recently celebrated its 25th anniversary, is not available today. When asked, if the company would re-introduce it with the changes in logistics, Mellquist said, “Volvo FH is a powerful truck fit for long-haul transport. Depending on how the market evolves, we might introduce this model.”
“Looking 20 years or so ahead, we see that the premium European segment in India will continue to grow thanks to the diversifying needs of transport and greater awareness of total cost of ownership. In addition, we know that autonomous solutions and electromobility will be game changers for the industry. While we don’t expect to see fully autonomous vehicles on Indian roads any time soon, we know that it could make sense to deploy this technology in certain applications, like mining, where the environment and legal framework is less complex,” reflecting on the future, Mellquist said.

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