As Volvo Group spent the last four years consolidating and streamlining its operations after previous acquisitions that included Mack, Renault and UD, “maybe we became a bit too internally focused,” Claes Nilsson, executive VP of Volvo Group and president of Volvo Trucks, told reporters at Volvo Trucks North America’s Dublin, Va., plant this week. But a recent reorganization and a new emphasis on brand organization is helping put more focus back on the customer, he said.
“We want to much more focus on business, on customers, and seeing that the different brands really can grow our business,” said Nilsson, who is based at Volvo's headquarters in Sweden. He met with trucking media in the middle of an ambitious week-long U.S. tour to meet dealers and customers.
The U.S. and North America, he noted, are one of Volvo’s biggest markets and also one where there is plenty of opportunity for growth. Although Volvo Trucks North America had a record-setting truck sales year in 2015, it ended the year with a 12.5% market share in Class 8, putting it in fourth place just behind Peterbilt and just ahead of International, according to data from Ward’s.
“I would like to see us taking a bigger share of the market… focusing on customer satisfaction, making sure we have the right product offer, making sure we are very efficient in what we’re doing, taking care of customers at the dealers, how we deliver spare parts and everything else,” he said.
He emphasized the importance of Volvo’s people in this effort, noting, “it’s also very much about attitude and personalities.”
The People Make the Difference
When asked later to expand on that thought, Nilsson noted, “In our organization, people really enjoy meeting our customers, whether that is in service or parts sales or truck sales,” or on plant tours. “In our industry we’re still in a relationship industry, so the relations between our people and our customers is still very important. The difference between a workshop manager who is thinking every day about the customer vs. one who is just there to make a living, it’s such a huge difference. We’re looking for people that really like to take care of the customers, that go that extra mile for the customer.”
Goran Nyberg, president of Volvo Trucks North America, added that as a European and world traveler, “Coming to North America, the service business here when you come to hotels or restaurants is second to none,” he noted. “That’s the mentality we like to see in the dealer network. It is a cultural change – we are not just there to sell and repair trucks, we are there to please the customers' needs. To always put the best for a customer first and then figure out how you make that benefit for yourself. That’s easier said than done. I think it’s a brave move, but we are brave people.”
Franky Marchand, who heads up plant operations under the title of Logistics VP, Volvo Group Trucks Operations in Americas, also emphasized the people at the plant.
“It’s all about our people,” he said, adding, “we have an unusual link with the customers, a love for the customer,” that he believes is somewhat unusual. During plant tours, visitors are led right into the thick of things and are encouraged to talk to employees on the line. Not only does this give customers a better understanding of what goes into the building of their trucks, but the thinking is that the more the plant workers interact with the people they are building trucks for, the more attention they’ll pay to putting out a quality product and the more pride they will have in it.
Some of the ways Volvo is working focusing more on the customers, discussed by Nilsson and other Volvo execs during the briefing, included:
- Technology: “We really want to be a technology leader,” Nilsson said, talking about areas such as connectivity, platooning, and autonomous vehicles. “I think connectivity and electronics in the vehicles will also give a lot of opportunities to improve productivity for our customers.”
- New features: Volvo recently upgraded its engine platforms and its I-Shift automated transmission, with a focus on delivering better fuel efficiency as well as being prepared for the 2017 greenhouse gas regulations. It’s also been rolling out features and products for the vocational market such as crawler gears on the I-Shift.
- Customer experience: As previously announced, Volvo is building a new Customer Experience Center on the site of its New River Valley plant. This will be located near the Customer Experience track that opened in late 2014. Volvo’s plant is already a popular destination for customers, who get a closer, more interactive look at the process than at most other manufacturing plants. “Last year over 8,000 visitors in this facility. And there’s no Disneyland here; they came here just to see us,” Marchand said.
- Factory upgrades: The factory is in the process of upgrading all its welding equipment, replacing the robotics with the latest technology. And starting in September, Volvo will move to a new paint process that Marchand said will be “the most advanced paint system in the industry.” While the new technology will reduce paint waste and cut electricity use at the plant in keeping with Volvo’s focus on the environment, the benefit for customers will be a better, more uniform film thickness and better gloss levels and “distinctness of image.”
- Dealers: Even before the recent restructuring, Volvo Trucks North America had already been making signifiant investments in the dealer network, some of that done in conjunction with sister company Mack. Geofencing around dealers allows the company to keep track of when trucks arrive and when they leave. A new Certified Uptime Center certification program will recognize dealers with a next-level of uptime support, including parts availability and fast turnarounds.
Nyberg added that the company does not expect 2016 truck sales to match the highs of 2015, but still is projecting Class 8 sales overall to reach 250,000 trucks. He said there are some 60,000 trucks in excess inventory at dealers of all makes, including Volvo, which does present a challenge.
Despite a soft first quarter and beginning of the second as far as truck sales, Volvo expects the third and fourth quarters to be stronger, and Nyberg noted, “We see a good upswing in quote activity in vocational and vocational related business.” This is one area where Volvo has been working to make inroads, with new products, features, and attending shows such as World of Concrete where it had not typically been an exhibitor.
“I think uptime combined with a fuel efficient truck is a key ingredient for success going forward,” Nyberg said. “We will of course continue to design our products around our core values” of quality, safety, and care for the environment.