With the U.S. economy in the midst of its longest peacetime expansion, Marc Gustafson, president and CEO of Volvo Trucks North America, questioned why truck stocks have not performed better in his speech to the Heavy Duty Manufacturers Assn. Friday at the Mid-America Trucking Show in Louisville, KY, last week.
"The performance of truck stocks is difficult to accept when we are constantly inundated with stories about the Dow breaking the 10,000 mark," Gustafson said. "Even more astounding is the fact that most of us just completed the most profitable year in our respective companies' history."
So why, Gustafson asked the audience of 500, did trucking stocks fall 3% in 1998? "The capital markets view our business as part of the ‘smokestack industry' during an age in which ‘dot-com' is in fashion."
Ironically, 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.
Other changes on their way include integrated products and a dramatic change in truck distribution channels.
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.
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.
"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."