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Volvo Chief Talks About The Future At HDMA

March 30, 1999

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Big changes are coming in the way we spec, buy and sell trucks, said Marc Gustafson, president and CEO of Volvo Trucks North America, in a speech to the Heavy Duty Manufacturers Assn. Friday at the Mid-America Trucking Show in Louisville, KY last week.

While you won't see European-style vertical integration, Gustafson says, you will see more of a modular approach. The industry can't afford to have hundreds of products to spec and hundreds of companies to deal with. Customers will still have choices. But they will be choosing between highly engineered product packages and systems, not individual bolt-on products. Tighter emissions standards that go into effect in 2002 will mean limited driveline choices because of the heat that will be generated by the engines.
Gustafson predicted that dealers will be focusing more on parts and service as customers start buying more trucks through "infomediaries" such as Auto-By-Tel in the automotive industry, putting big pressure on new truck pricing. But this will eliminate inefficiencies in the distribution network. If we were to recreate the dealer network today, Gustafson said, we wouldn't have independent dealers serving transient customers from locations that are often away from main travel lanes.
He also said Volvo is moving toward a guaranteed operating cost model. That will require a virtual (Internet-based) service network and more accessible service locations. Volvo's new deal with Petro addresses both of these issues, adding more, convenient service bays and using Volvo's new "virtual dealer" kiosks in truckstops.
Gustafson said that most of these changes will revolve around the quick dissemination of information. Truck drivers have become one of the fastest-growing groups of Internet users in the country. Volvo is working with Park 'N View to build an Internet-ready truck, and was the first manufacturer to sell new heavy trucks on the World Wide Web.

"The foundation is being laid for an accelerated deployment of new technology," Gustafson said.
"Information technology is about to revolutionize the business of heavy duty trucking," he said. "If we don't stake out a new position in that market space, others will do it for us."

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