Volvo eyes bright future

Volvo Group Australia President Peter Voorhoeve says the firm's Volvo, Mack and UD brands are positioning themselves to take advantage of Australia's transitioning economy, with the shift from mining to non-mining activities representing a fresh opportunity to increase market share.

Mr Voorhoeve was speaking at Volvo Group Australia's annual press conference, held at a Brisbane VGA dealership just before the opening of the 2015 Brisbane Truck Show.

There he updated transport media on Volvo's progress both globally and locally, and said that even though the local heavy-duty truck market was presently soft, there was significant cause for optimism.

"Australia is moving from a mining-related economy to a non-mining-related economy," he said.

"The investment in mining is over, and we need to get used to it because it's never coming back."

Softening demand from China and supply meeting demand for mining commodities globally have brought Australia's resources boom to a close, but Mr Voorhoeve said there were already positive indicators of future economic growth.

"I see northern Queensland in trouble but I see in Rockhampton some green sprouts there – cattle in general is doing well," he said.

"I think agriculture has a good future, and with the [Australian] dollar now at 75 US cents, Australia represents far more value for money, so I think we will see certainly see tourism go up. There are a lot of reasons why the economy will go up again but we are in a transition mode for the moment."

Mr Voorhoeve said the transport business in Australia was on a very strong footing, representing 15 per cent of GPD, moving 1.5 billion tonnes of material daily, and employing almost 600,000 people. Road freight in Australia is projected to double by 2030, he said, citing recent government reports.

"Why? Because every year more people are coming to Australia, and a lower dollar will stimulate the cattle, agriculture and tourism industries, which will drive transport up," he said, while also citing the trend towards urbanisation as a further positive influence.

"So long-term Australia is good business and transport in Australia is good business, so selling trucks in Australia is good business. And building trucks in Australia is even better business, and that's the business we're in."

Volvo Group Australia ended 2014 with a 24.6 per cent market share in the heavy-duty segment, with 13.5 per cent for Volvo, 9.2 per cent for Mack, and 1.9 for UD.

"All three brands were up, and UD in the medium-duty segment was up to 8.9 per cent [market share], which was also up," said Mr Voorhoeve.

The VGA President said Australia's transitioning economy was leading to an overall trend of consolidation in the transport business, with major players wanting more value from their transport contracts.

"The transport contracts that are being given out by the Rio Tintos and the BHP Billitons of this world, they basically want more value for money," he said.

"I've heard of contracts given out where they expect a 25 per cent reduction."

This in turn means transport operators have to become more efficient, said Mr Voorhoeve.

"I want to be there with our customers to see how we can drive their business in a more efficient way – how can we help with fuel coaches and safety coaches, how can we help with maintenance schedules so we have maximum uptime for the trucks and a lower running cost?" he said.

"From that point of view I see the change in the economy as a little bit of an opportunity. I believe the ones that are there for their customers will benefit."

Mr Voorhoeve cited the announcement of the group's new cost-effective parts offering for older trucks – Volvo Classic Parts, Mack Vintage Parts and UD Heritage Parts – as just one more example of the company's commitment to helping its customers improve their bottom line.

Mr Voorhoeve said that at the heart of the truck business, beneath all the group's aftersales activities and services, lay one core goal.

"Behind all of this lies one driving factor," he said.

"Ask me last year, ask me today, ask me next year, what is it that we [Volvo Group Australia] want? We want to be number one in customer satisfaction.

"I would like to have the same customer experience all over the country regardless of where you are. [In that respect] we're good – let's face it, most of the manufacturers are good – but we need to be better, and we are on a journey to be become better.

"Service, service, service – that's my motto, and that's the motto of Volvo Group Australia. And we see that our customers like that, because in a declining truck market we have increased market share."