Volvo’s Koeck: 'Reset' Coming for North America Trucking

Tremendous regulatory forces will soon be coming into play for North America fleets, said Magnus Koeck, vice president, strategy, marketing and branding for Volvo Trucks North America, in an overview of trucking market conditions in North America. The picture Koeck painted was generally upbeat.

His remarks to trucking journalists came during a briefing at Volvo's Customer Center adjacent to its New River Valley Truck Plant in Dublin, Virginia. The occasion was showing off its new, reimagined, VNL Class 8 tractor that it unveiled virtually last month.

The upshot for 2024, Koeck said, is that fleets can expect generally positive economic conditions in the future, sprinkled with a generous helping of change.

A Unified Global Product Push

“What we are talking about is a ‘reset’ for the trucking industry in North America,” Koeck said in his opening remarks. But, he added, Volvo is well-prepared to help fleets navigate the many changes headed their way.

“In 1996, Volvo introduced the first-ever aerodynamic truck in North America,” he noted. “And people wondered if it would be a success. Today, most new trucks introduced in North America are aerodynamic designs.

"And the same was true when Volvo introduced the I-Shift automated transmission in 2007. Many people wondered what we were doing. And today, automated transmissions are the industry standard. So, we are confident that we can help set new standards across the board for our North American customers.”

While this coming reset will include hydrogen fuel cell and battery-electric trucks, Koeck said Volvo has no intention of abandoning the internal combustion engine or diesel fuel any time soon.

“Right now, the North American market for battery-electric trucks is about 1,000 units,” he said. “So, how can Volvo make the biggest impact right now for the environment?”

The answer, he said, lies in the all-new VNL tractor.

“The new VNL is 10% more efficient than the current model,” he said. “And if we can push the North American trucking industry toward a 10% in fuel efficiency gains with new diesel trucks, that would be the same as putting 30,000 new battery-electric trucks on the road.

"Such a move would have a major, measurable, impact on the decarbonization of trucking. That’s because every gallon of diesel fuel saved translates to 22.4 lbs. of CO2 taken out of the atmosphere.”

Koeck underscored the importance of the new VNL by noting that a week after the truck’s launch in North America on Jan. 23, the OEM launched its all-new cabover range in Europe.

“That is the first time ever that — within a week — we have launched an all-new, global range of trucks,” Koeck said. “That is a remarkable achievement.”

Record Class 8 Truck Prebuy Looming

Koeck said Volvo closed out 2023 with 30,222 Class 8 units sold. That translates into a 10% share of the North American market. Koeck admitted the OEM would like to have seen somewhat higher numbers. But, he added, several factors outside of Volvo’s control hindered 2023 sales, including:

• VNR Electric model recalls
• The Mack Trucks strike (Mack is a wholly owned subsidiary of Volvo Group)
• Increased research and development costs associated with new trucks.

Volvo is investing more than ever before in research and development for many technologies, Koeck added. And more will come, he promised.

“On a positive note, Volvo has record high customer satisfaction,” he said. The company's net promoter score (which measures customer loyalty by looking at their likelihood of recommending a business) are at an all-time high.

"We have improved our parts availability. Our product quality is outstanding. The New River Valley Truck Plant is keeping pace with demand. And Volvo has established its reputation as a global leader in sustainability.”

Looking at the year ahead, Koeck confidently stated that there will not be recession.

“We are already in a ‘soft landing’ in economic terms,” he said. “Inflation is much better. The freight market appears to have bottoming out. And it will go up from here. The spot rate market is already improving. And that is a good indicator for the future.”

The Class 8 truck market has reached peak demand for the moment. Koeck said Volvo believes it will come back quickly.

“We believe the North American Class 8 market this year will come in around 270,000 units,” he said. “But, 2027 will bring much more stringent emission regulations to North America. That will drive a prebuy in the market that will mostly likely be a record year in terms of Class 8 sales for the United States and Canada.”

Koeck said he would not be surprised to see this prebuy begin in the second half of this year and remain strong into 2025 and 2026.

“In that bigger picture, 270,000 units this year is still a very good market,” he noted. “But after 2027, there will be a big dip in sales due to the new emissions regulations and associated dramatic prices increases for new trucks.”

Koeck said this year, Volvo will focus on establishing its new VNL tractor in the marketplace.

“We are focused on customer satisfaction, our sustainability strategy and our service offerings,” he said. “VNL order books will open in April. And we expect to see market share gains in North America once this new truck is available for sale and enters into service.”