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Volvo vows to become bigger player in North American Class 8 market

ROANOKE, Va. - As new truck order boards begin to gradually fill in, the head of Volvo Trucks North America says he sees an opportunity to reshape the North American Class 8 market share landscape.


ROANOKE, Va. –As new truck order boards begin to gradually fill in, the head of Volvo Trucks North America says he sees an opportunity to reshape the North American Class 8 market share landscape.

Speaking candidly to trucking trade press editors during a recent roundtable near the company’s Virginia truck plant, Volvo CEO Denny Slagle said 2010 is “a whole new ball game.”

No longer content with its place among North American truck makers, Volvo has a plan to gain market share by providing customers with the “best solution now and for the future,” Slagle said. At the heart of the company’s ambitious plan is its EPA2010-compliant emissions solution using selective catalytic reduction (SCR). Volvo feels it’s best prepared for 2010, having been the first to get its 2010 engine certified by the Environmental Protection Agency and completing an extensive validation program that includes more than two million customer-driven miles.

Slagle admitted Volvo has stumbled in the past, including with the roll-out of its EPA07 product line.

“We weren’t proud of how we executed 07,” Slagle admitted. “We learned from that, and since 2007 I don’t think there’s been any other manufacturer that has more test miles, more trucks on the road and is more ready for 2010 (than Volvo). We have some wounds to heal but I really like the story for Volvo Group, quite frankly.”

In hindsight, Slagle said he wishes Volvo could’ve rolled out its SCR solution for the previous EPA emissions go-round in 2007.

“We should have gone to SCR in 2006,” he said. “In my mind, you took the engine a bridge too far in terms of trying to accomplish (EPA07 emissions targets) through EGR in 2007. With 20/20 hindsight, you could build a case for going to SCR then, because then all you’re doing is letting the engine do its job and putting an air cleaning machine behind it. (SCR) lets an engine be an engine again.”

Confident in its 2010 truck and engine combo, Slagle said Volvo Group has the right solution for the ever-evolving North American customer, who is increasingly sophisticated.

“If you’re a very sophisticated buyer, the things you have to think about now and for the next four to five years, and that’s the time your next purchase is going to span, is what is it going to be worth? How am I going to make money with it? Are they going to create more (emissions) standards? All I’m saying is, I think the market will benefit somewhat from the stability and the package that Volvo delivers,” Slagle said.

And while Cummins will remain an important partner, Slagle said even greater efficiencies can be achieved when allowing Volvo to build the entire package.

“People used to buy an engine and put a truck around it,” Slagle said. “Now, they’re buying a truck. In order to meet all we have to do in terms of regulations and greenhouse gas emissions, the more we can design our whole truck from the engine to the transmission and synch it up, the better in control we are and the easier it is to achieve what’s in front of us.”

Slagle acknowledged that just because the company has a compelling product for customers doesn’t mean it will achieve its ambitious targets, the specifics of which weren’t shared with reporters except to say “our goal is not to stay where we are.”

“We still have to execute,” Slagle added. “In capitalism you get precisely what you deserve and I think we’ve gotten what we deserve. We will win back the day. I honestly think there’s a rare opportunity here to make the type of (market share) movement that happened in 2007.”

In 2007, the roll-out of EPA07-compliant engines and several new product introductions shook up the North American market share picture, mostly to the benefit of Navistar. This time around, Volvo Group stands to be the benefactor, Slagle said with confidence.

Ron Huibers, senior vice-president, sales and marketing, agreed, adding Volvo will target new markets as part of its growth strategy.

“You’ll see us having a broader customer base going into the future,” he vowed. “The large fleets are important, but it’s also the regional fleets and other customers -we have to have better penetration across all the segments. We have a good solution for the segments of the market we haven’t done as well on.”

The North American Class 8 market in general is poised to grow 20-30% this year, Slagle predicted.

“It feels like we have legs under us with the economic recovery,” he said. “Trucks are getting utilized again, the parts business and aftermarket business is picking up quite a bit and that’s one of the signals that trucks are going back to work…I believe there are a lot of fleets out there with their finger on the trigger.”

Slagle hopes to see similar gains in 2011, but stopped short of issuing a projection because “the markets are so event-sensitive right now, everything spooks the market.”

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‘It’s a whole new ball game,’

-Volvo/Mack CEO Denny Slagle


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