Volvo Trucks's Peter Voorhoeve: Interview

New Mack in the pipeline, global restructure, Lundstedt’s new broom, the Isuzu flirtation and more

The President of the billion-dollar Volvo Group Australia has confirmed that there is a new Mack coming to the Australian market, possibly by the end of 2017.

Peter Voorhoeve (pictured) made the confirmation during a Question and Answer session with TruckSales last week.

When asked if the rumoured Mack upgrade was happening, Voorhoeve said: "It will be a big change, yes, absolutely! Literally a next century kind of thing."

Former Scania Chief Martin Lundstedt was wooed to Volvo to be the Global President of the Volvo Group. His first move was to change the marketing structure of brand ‘homelands’ to brand silos, each with its own profit centre. We asked Voorhoeve if it was a case of a new broom?

Peter Voerhoeve: Martin Lundstedt has a very strong customer focus and top-line focus. I think he saw that all the brands are unique and need separate attention. I think it is not so much a new broom because we are not hiring and firing people, we are just working in a different way. I think the changes have been his way of saying that only economy of scale and cost efficiency is not enough to run a company with. By focussing on the brands he makes a statement: This company is not just about cost levels alone, this company is about brands and customers.

TruckSales: Before Martin Lundstedt’s appointment as Volvo Group president, Olof Persson headed up the big multinational. His tenure as the Big Boss only lasted four years. What wasn’t working?

PV: I’ll start with what was working. Olof consolidated the different companies[acquired by Volvo]. With Volvo Trucks, Mack, UD, Renault, Volvo Construction Equipment and so on there was no synergy. Olaf came in and created that synergy and drove the processes a bit harder. I don’t think he did anything wrong quite frankly, but the Board said at a certain moment, okay we have driven the economies of scale, we’ve driven the efficiency program, that’s now finished and now we need someone who will focus more on the customer and the market and the Board decided that would be Martin Lundstedt.

Twenty years ago with Leif Johansson as President, the Volvo Group changed from being a single-branded car and truck manufacturer into a multi-branded commercial vehicle operation. Then came Olof Persson. He started consolidating, centralising, working our efficiency up and our cost levels down because it was very necessary. And now with Martin Lundstedt we have to work on our customer focus.

Now with the company going back to a brand-based organisation, it is actually reinforcing the setup that we have here with a separate Volvo truck sales organisation, with a separate Mack truck sales organisation and a separate UD truck sales organisation but with multi-branded service organisations.

TS: With two years at the wheel, has VGA met your early aspirations?

PV: My focus over the last two years has always been service, service, service. Care for the customer. I said to everyone that I want to be first in customer satisfaction, more so than in market share. I believe that sales follow service. I think the biggest challenge has been that I would like to get consistent service at all our service points. We don’t have bad and good service points but there are still differences and we have to create that same customer experience over all the service points. We investigate customer scores and they are going in the right direction.

We are well distributed over the different sectors. I’m not sure that any one sector is more profitable or lucrative than the other sectors because everybody has the same profitability expectations. The mining boom was lucrative because customers had no patience, it was, 'I don’t care what it costs, get me that truck!'

That has now changed for everybody. Now customers have time, they can look at the price and say ‘if I don’t get in January, I’ll get it in February.’ I think the price pressure has increased enormously in all the different sectors. Mining is less than it was in terms of volume, general logistics is pretty good, with seen improvements in the rural sector with increased beef prices, general freight is doing pretty good. But lucrative? I’d hardly say there are any lucrative sectors.

TS: What is happening with UD and Isuzu?

PV: In order to get ready for the next emission regulation, we have decided to work together with Isuzu. We have enough stock of our current range to last a couple of years. By the time we are ready we will have an OEM agreement in place with Isuzu. We will have the same commitment with the new trucks as we have with today’s models.

TS: Do you see growth in the lighter end of the truck market with the change in personal delivery platforms and digital connectiveness?

PV: Definitely in the light duty area, the three tonners, there will be growth. You see it right now if you read the truck market reports. Truck sales are increasing but not in the heavy duty segment. It’s mainly light duty and that is to do with how our behaviour as consumers is changing.

Volvo Trucks's Peter Voorhoeve: Interview

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