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

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TruckSales  /  April 12, 2017

Volvo Group Australia head Peter Voorhoeve* says a new Mack is coming to the Australian market, possibly by the end of 2017.

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 Peter Voerhoeve if it was a case of a new broom?

"Martin Lundstedt has a very strong customer focus and top-line focus," says Voerhoeve. "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 focusing 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?

Peter Voerhoeve:: 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?

Peter Voerhoeve:: 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?

Peter Voerhoeve:: 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?

Peter Voerhoeve:: 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.

 

*  Amsterdam-born Peter Voorhoeve has headed Volvo Group Australia since November 2013.

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Approach pays off for president

Big Rigs  /  May 29, 2015

Volvo Group Australia president Peter Voorhoeve is not your regular company head.

He hails from Holland and moved his family half way around the world to take the top Aussie job 18 months ago. When you think of company leaders, you tend to picture ruthless men with phones strapped to their ears.

Mr Voorhoeve is more likely to give you a hug than a vice-like handshake - and he takes the time to personally deliver trucks to some of his customers.

His approach has seen the Volvo Group beat long- standing top truck sellers Kenworth in the 2014 sales stakes - something he tells Big Rigs he didn't set out to do.

In fact, Director, Marketing & Communications for the group Julie Skerman corrected us, saying it was her words at last year's media conference that she wanted Volvo to be number one.

Mr Voorhoeve says he always wanted Volvo to be number one in customer satisfaction, but admitted that would ultimately get them to the top of the sales ladder.

There's still work to do he concedes but they're a long way towards their goals.

He tells us that the last 18 months he's been in Australia and the new role has been "very good".

"It's a very exciting market."

He brought his entire family with him to Australia, his wife, son 9 and daughter who has just turned 11.

They've adapted to the country and like the Australian way of living - Mr Voorhoeve said it was easy to adapt to the Aussie way of life.

He said the Australian truck market was "interesting" because it was so different here than anywhere else in the world.

"We take transport by truck a couple of steps further for instance than what we do in Europe, with road trains and PBS applications.

As a manufacturer you need to be really technically well equipped to be able to meet all the customer demands."

It makes the company work on better designed products for specific applications.

"What my goal was, and still is by the way, is that we want to be number one in customer satisfaction.

"I think it's a bit easy to say I want to be the number one truck builder. At the end of the day everybody wants that.

"What I specifically want for this organisation…is that we are leading in customer satisfaction.

"I want to be seen really as the truck manufacturer, or transport solution provider, that cares."

"That is there for its customers and that doesn't stop, so to speak at the sale of the truck."

He wants the Volvo group to be known for its customer-centricity and going the extra mile.

"That's where I want to be leading, that's where I want to be recognised.

"And then normally sales follow."

"Let's face it at the end of the day transporters do not only buy trucks for fun...they're professional operators, they need to transport goods from A to B they want it in the most efficient way possible, we need to make sure that we support them in that job. We call it uptime," he said.

"Especially now days with an economy that is not what it was a couple of years ago. That demand for uptime and efficiency only becomes louder."

Mr Voorhoeve said it wasn't a fast process like turning on a "light switch" and it wasn't moving slower or faster than he had hoped.

"It's something you need to earn."

But he's not saying that the group was bad in customer satisfaction, instead that's where they want to focus with the products and services on offer.

"We see it happening."

Mr Voorhoeve is hands on when it comes to customer service, getting behind the wheel whenever he can, delivering trucks to some customers.

Sales outcome

Last year, with the three brands together Volvo Group ended with a 24.6% sales share, which saw them become the number one brand.

"I think Kenworth last year was at 23.5% and Volvo Group were at 24.6%...I think it was the first time in many many years that we ended up as number one in heavy duty," Mr Voorhoeve said.

"Today quarter one we are at 24.5% Kenworth is at 25.3%."

"You know how many trucks it is? 22 (trucks)."

Tough times

The market is not "fantastic" at the moment. When it comes to truck sales were 14% behind last year's quarter and Mr Voorhoeve doesn't think we'll sell much more than 10,000 trucks.

"We all know the investment in mining is over.

"At the same time exploration, so the amount of coal and ore that we take out of the ground is volume records high … At relatively low prices.

"What you see is an economy that was completely mining operated, and from that source there's less money coming into the country.

"But there is still economical growth in Australia. That's coming out of other areas. I think the whole economy now has to shift and is shifting from mining related to non-mining related.

"We're being helped by an Australian dollar that is going down."

"I hope that in 2016 the Australian economy and Australian industry has readapted to this new economic reality."

"Let's not forget 10,000 new trucks in the heavy duty market from historical perspective is not so bad. But I don't see any miracles happening quite soon.

"I've always believed in standing next to your customer, helping him or her. And of course in these days where everybody is looking for efficiency, customer centricity, customer satisfaction is what you need. That's the right strategy."