Volvo exec sees truck maker well positioned to help fleets with major issues
August 15, 2011
As Volvo Trucks' U.S. operations enter their fourth decade, Magnus Koeck is extremely optimistic about the future of Volvo Trucks North America. Koeck, vice president of marketing and brand management for VTNA, says the company's forecasts suggest that the market in the coming years will go steadily upwards, peaking in about three years.
"We are well positioned despite the fact that our VN-model is somewhat aged," he said. "The 2011 aerodynamic updates, presented at MATS, make the VN extremely competitive. We must remember that VN was very well ahead of its time when it was launched in the late '90s."
Koeck points out that Volvo has many good examples from other parts of the world to transfer to the U.S. market. "Historically, the organization may not have been sufficiently sensitive to such success stories, but we are changing that now."
Koeck sees several challenges facing U.S. trucking where he believes Volvo products can help. "Fuel economy, driver comfort and safety are Volvo's trump cards," Koeck says. "We already own the concept of traffic safety, and our EPA 2010 engine is second to none when it comes to fuel efficiency."
The price of diesel in the U.S. has doubled in recent years. Although $4 a gallon is still less than half what truckers pay in Europe, for Americans, it is a price shock and a matter of survival, he says.
In comparison to EPA '07 engines, Koeck says, the EPA 2010 Volvo engines offer 5% lower fuel consumption. Aerodynamic improvements on the VN announced this year provide an additional 3%. "And we have more new products on the way to increase fuel efficiency even further."
Beyond the cost of fuel, Koeck notes, the largest variable cost for a trucking company is driver pay, and as the economy recovers, the ever-present driver shortage is becoming even more visible. Koeck believes Volvo's I-Shift, a 12-speed, two-pedal, automated mechanical transmission, is part of the answer.
"Traditional U.S. trucks with unsynchronized transmissions that must be double clutched when shifting and to fit exactly with the engine rpm is very difficult to run for newcomers to the professional drivers field," he says. "According to the American Trucking Associations, the shortage will in a few years be some 400,000 truck drivers. Here, our I-Shift is the future. Both in terms of lower fuel consumption and easier drivability."
The I-Shift was introduced in the U.S. in 2006. Year to date, VTNA figures show it's being spec'd in about 40% of new trucks. (In Europe, 80% of Volvos have the transmissions.) The transmission is also offered in some of sister company Mack's models under the name mDrive.
Safety has long been a watchword at Volvo, and Koeck sees an increased interest in crashworthiness in the U.S. In a joint letter recently to the National Highway Traffic Safety Administration, the American Trucking Associations and the Owner Operator Independent Drivers Association called for establishing standards for crashworthiness of heavy trucks.
"It is important to offer a safe and efficient workplace, a truck that drivers enjoy," Koeck says. "We at Volvo are very good at that. It's a challenge to focus and convince new customers of these benefits." Looking back at 30 years
In the spring of 1981, Volvo Trucks' global main competitor, Daimler-Benz, acquired Freightliner - at the time Volvo's U.S. partner and importer/ distributor of the Volvo N10 and the medium-duty F6 and F7 COEs.
The Volvo distribution agreement was cancelled, so the company had to come up with another way to secure a bridgehead in the U.S., one of the world's largest truck markets.
So on Sept. 1, 1981, Volvo White Truck Corp. started as a completely new company, headquartered in Greensboro, N.C. In 1988, it changed its name to Volvo GM Heavy Truck Corp. And in 1998 it was changed again, to Volvo Trucks North America.
White Motor Corp., which got its start building steamer cars in the early 1900s, had become insolvent by the time of deregulation in 1980. From the Chapter 11 company, Volvo chose certain assets. In addition to the White nameplate, Autocar was part of the $70 million deal.
Through the acquisition, Volvo took a shortcut into the U.S. market. White had a torn but established dealer network and a modern range of products adapted to American customer requirements. In addition, Volvo now became a domestic producer. By the fall of 1982, assembly of the medium-heavy Volvo F7 started in the New River Valley plant.
In 1983, the White trucks were face-lifted and equipped with Volvo's traditional symbol, the slash across the radiator. In its first five years, the Volvo White product line introduced more news to the market than any other truck maker in the United States. The market share doubled from 5 to 10%. Top of the line was the Integral Tall Sleeper, a first with the cab and the sleeper combined into one integrated unit with full headroom.
In 1984, local assembly of the Volvo N12 conventional with Volvo's own driveline started in the New River Valley plant. The idea was to get customers interested in Volvo's proprietary 12-liter diesel engine, also offered in White trucks as an alternative to Caterpillar, Cummins and Detroit Diesel. The Volvo N12 conventional was phased out after only three years, with 2,000 built. An attempt to sell Volvo synchromesh gearboxes in the N12 also was not a hit with U.S. truckers.
In 1986 the Volvo FE series, a low COE for distribution, was launched.
When GMC decided to get out of the heavy truck business, Volvo became its partner. On Jan. 1, 1988, the Volvo GM Heavy Truck Corp. went into operation. At the same time the market got a new, tongue-twisting truck brand, WhiteGMC.
But the merger did not meet expectations. Before the merger. Volvo had approximately 10% market share in Class 8 and GMC had 8%. The combined company reached 12% market share at its best. The cooperation ended in 1998. Thage Berggren, after he retired, said the name "WhiteGMC" is a textbook example on how not to handle a brand name.
During the second decade, 1991-2001, VTNA introduced the Volvo VN Series for on-highway (1997) and VHD for vocational (2000).
In 2001, Volvo engines were installed in 30% of sold trucks. Today, 10 years later, the Volvo engine represents 80% of total sales.
This third decade included the addition of Mack as a sister nameplate, since it was a subsidiary of Renault Trucks, acquired by Volvo in 2001. This period saw the VT880 premium model introduced in 2005 for the owner-operator market. In 2009 it was discontinued.
Today Volvo's North American operations are headed up by Dennis Slagle, who since late 2009 heads the North American Truck division that oversees both Volvo and Mack.