Volvo Trucks Seeking 15% Market Share

Nov. 14, 2013
Volvo Trucks executives, in a briefing in Guadalajara, Mexico, said the company plans to gain market share in Mexico and push its Class 8 numbers up both in Canada and the U.S. as well.

Volvo Trucks executives, in a briefing in Guadalajara, Mexico, said the company plans to gain market share in Mexico and push its Class 8 numbers up both in Canada and the U.S. as well.

“Volvo Truck currently holds a 9% market share [1,289 units] in Mexico and our stated goal is to raise that to 15% by 2015,” Goran Nyberg, president of North America sales & marketing, told Fleet Owner at the Expo Transporte truck show. “In terms of Class 8 sales in the U.S. and Canada, we’re now above 11% and at 13%, respectively. We want those numbers to be at 15% as well, in the near term.”

Matthew Walsh, Volvo Trucks’ managing director—Mexico region, noted that Class 8 equipment accounts for 7% of the 9% Mexican share with the remainder provided by vocational and straight trucks.

Asked if Volvo might add a straight truck model, such as the FE cabover it sells in Mexico, to its U.S. lineup, Nyberg told Fleet Owner there are “no plans to do so, but we are always looking at possibilities.”

As to how Volvo will attain a 15% market share in Mexico by 2015, Walsh said the truck and engine maker will key in on the value it offers buyers, especially larger fleets that take their equipment investments very seriously.

He pointed out that there are only some 100 fleets in Mexico that operate 100 or more power units. “These larger fleets want to run the same technology as U.S. or Canadian fleets.”

Walsh said that is why, unlike some OEMs, Volvo does not “de-content” the safety features, such as electronic stability control, the trucks that it exports to Mexico from its U.S. plants. “That strategy,” he added, “is part of the strong brand proposition we offer buyers here.”

He noted that safety is a driving issue for Mexican fleets, which view it “with the same social and financial importance as U.S. fleets.”

Walsh related that a propensity here for building housing right at the edge of highways leads to particularly catastrophic crashes. Since those involved in these devastating accidents can be hit with high fines, he referred to such crashes as “carrier killers” and thus a big reason Mexican fleets so readily embrace advanced safety technology.

According to Walsh, the reception the arrival of the I-Shift automated transmission here has received demonstrates the high interest in technology, in this case primarily to boost fuel efficiency, held by Mexican fleets.

“Even before the I-Shift was officially launched,” he explained, “we received 245 orders. We’ve already filled 170 of them.”

Walsh also pointed out that this year, 70% of the trucks the OEM sold in Mexico were powered by Volvo engines.

Nyberg added that he was impressed by the positive buying mood on the floor of the commercial-vehicle show. “We don’t ordinarily think of this [ExpoTransporte] as a ‘selling’ show,” he told Fleet Owner, “but we’ve been selling trucks at our booth this week.”

Walsh observed that the market for new commercial trucks in Mexico is destined to grow in the near future, in part due to a key government action.

He said over 400,000 of the roughly 750,000 Class 8 trucks on Mexican roads are at least 20 years old. Intent on removing these less safe and less efficient vehicles, Walsh explained that the Mexican government has launched a “sort of ‘cash-for-scrappers’ program that provides a tax voucher toward the purchase of a new truck that is big enough to cover the down payment. The trucks turned in come out of the market as they get scrapped at a government facility.”

He added that about 80% of Volvo’s sales now involve the scrapper vouchers. On the other hand, Walsh noted that truck sales are dampened by the 8,000 or so used trucks that arrive in Mexico from the U.S. and Canada.

While Volvo currently sells its trucks in Mexico powered by engines that either meet the U.S. EPA 2004 or the Euro 4 exhaust-emission standards, Walsh said that Mexico is expected to adopt the stricter EPA 2010 rules in January 2018.

“That change will be a bigger issue for our competition that builds their trucks here,” Walsh remarked. “As we build all our trucks in the U.S., we can bring new technology to this market faster.”