Volvo Global Trucks will retain its three distinct brands in world markets: Volvo, Mack and Renault.
For North America, that means Volvo Trucks and Mack will maintain separate dealers and service and develop trucks that will compete in various markets and vocations. That's the word from Tryggve Sthen, president and CEO of Volvo Global Trucks, speaking last weekend in an interview in Southampton, England.
Sthen was in Southampton for the start of the Volvo Ocean Race, a nine-month epic that sees the world's top yachtsmen compete in a series that takes them around the world. This year's event features eight teams in the 64-foot racing yachts competing over the nearly 33,000-mile race. It finishes in Kiel, Germany, in June 2002 after visiting ports of Capetown, South Africa; Sydney, Australia' Wellington, New Zealand; Rio de Janeiro, Brazil; Miami, Fla.; Baltimore, Md.; La Rochelle, France; and Gothenburg, Sweden.
Volvo is sponsoring the race this year for the first time because, said Sthen, the sport is one that represents Volvo's core values. Also, the high-profile event will gain extensive media coverage around the world. "It embodies the core values of the environment and safety. It goes well with what we at Volvo stand for," he said in the interview aboard the MV Galaxy, a cruise ship specially chartered to provide a viewing platform for the race start to more than 1,000 Volvo personnel and guests from around the world.
MV Galaxy was also the official start point, forming one end of the line joining across Southampton's Solent to the Royal Yacht Squadron on the far side. A cannon to start the race was fired at 3 p.m. Sunday, Sept. 23, by Prince Andrew, the Duke of York, setting off the eight yachts to a face-paced adventure across the oceans of the world.
Volvo senior management present also included Thomas Ericson, president of Volvo Group North America. Ericson, with Volvo AB president Lief Johansson, a week earlier had pledged Volvo and Mack truck and construction equipment in the aftermath of the World Trade Center terrorist attack.
In the interview with Sthen and Ericson, attended by only three North American trucking journalists, Sthen said that the three Volvo Global Truck brands -- Volvo, Mack and Renault VI -- have very specific identities that give them unique qualities in the markets they serve. These brand identities are not driven by the manufacturers so much as by the perceptions of the customers who specify and buy them.
Sthen said Volvo research has shown that customers agree on Mack's reputation for ruggedness in severe service, Volvo's for safety, uptime and driver friendliness. In European markets, Africa and the Middle East, Renault is perceived to be innovative with a customer interface that leads the trucking industry.
By maintaining established brands in the markets, Volvo Global trucks can leverage those perceptions and qualities, he said.
While maintaining brands and dealers, Sthen said there undoubtedly would be economies available to the company in the support areas. "It obviously makes sense to combine the research and development," he said. Asked about engine design and production and the move to common power units throughout, he said that the market demands Mack has a Mack engine and Volvo has a Volvo power unit. However, he noted that currently Volvo engines -- which are taking a close to 40 percent share of Volvo trucks in North America -- are shipped from Sweden, and it only makes sense to manufacture them in America. Also, a recent announcement of Volvo engines in Renault trucks in other markets obviously points a way forward for the global strategy.
Global World Trucks was officially formed in January. According to Sthen, while the North American sales picture is depressed, in other markets the various brands are doing well. Latin America sales are good, he said, with Brazil up 30 percent. Asia is also strong with growth in Korea. And, while Japan is down, the Volvo niche is growing.
Volvo and Mack's response to the depressed North American market has been to reduce current inventory and build rates to keep production in line with orders. This has been achieved through reductions in headcount and further reductions in production with "stop" days. Sthen said that this year Volvo has had 20 stop days and Mack 58.
Sthen would not be drawn out on specific product plans, but did allow that telematics, wireless connectivity and automatic transmissions will figure largely in plans for future Volvo trucks in North America.

(For more on the race, visit www.volvooceanrace.org.)