So, Lundstedt brings order to Volvo

[kscarbel2]

Dagens Industri  /  June 27, 2016

Volvo has several strengths: favorable global market positions with high market share and high operational capacity in various regions, a steadily increasing profitability and well dedicated staff.

With an increasing scale, however, Volvo has increased in complexity, and to some extent even the bureaucracy, something that must be handled.

Furthermore, a problem is that the market share of some acquired operations has declined, and the reasons for this must be analyzed and addressed.

At the start of his meeting with investors in London on Monday, Volvo Group CEO Martin Lundstedt said Volvo has over the past years had too much focus on the structure and portfolio, at the expense of operational efficiency.

Furthermore, he said that Volvo should be able to expand the service by selling more to the existing fleet of 900,000 vehicles in service. He feels the term “aftermarket” is a funny expression, because service is a market in itself.

He also mentioned that investment, i.e. capital expenditure (CAPEX), at Volvo is too high and exceeds depreciation, which in the long run is not sustainable and must be addressed.

A new cost cutting program does not seem to be appropriate, according to Martin Lundstedt:

"Now it's more about continuous improvement in all areas on a daily basis," he said, and spoke of pragmatism.

"Setting goals is easy, but it does not change the underlying behavior," he said after mentioning that the right company is key to the success of the company.

Volvo's highest strategic priority is to strengthen the right qualities of the Volvo brand as a global premium heavy truck, as well as strengthening the sister brands Renault, Mack and UD Trucks' position and market share.

Lundstedt will attened an investor meeting in London on Tuesday.

For all truck brands, Lundstedt said, the future is characterized by concentrating on core markets and not go into each other's strong geographics.

[Red Horse]

Well I guess the following is good news as far as Mack goes..................

"For all truck brands, Lundstedt said, the future is characterized by concentrating on core markets and not go into each other's strong geographics."

My first thought was the "synergism" thing comes up and its "good bye Mack."  Hopefully their term "geographics" is not just limited to Geography as we know it but considers the uniqness of the markets that Mack is strong in.

 Like this

[kscarbel2]

7 minutes ago, Red Horse said:

Well I guess the following is good news as far as Mack goes..................

"For all truck brands, Lundstedt said, the future is characterized by concentrating on core markets and not go into each other's strong geographics."

My first thought was the "synergism" thing comes up and its "good bye Mack."  Hopefully their term "geographics" is not just limited to Geography as we know it but considers the uniqness of the markets that Mack is strong in.

 Like this

The Volvo brand will always be the priority, sitting alone in the front row.

The acquisition of the other brands was always about acquiring market share and/or absorbing competitors. They are a means to an end.

Volvo doesn't understand the value of the Mack brand. And under Volvo today, none of the Mack brand leadership have a background in trucks. Volvo doesn't listen to the voices of its US dealer body (the general consensus of Mack dealers coast-to-coast is that Volvo doesn't think these Americans could possibly know anything). The end result is, you have an unhappy dealer body, product line-up shortcomings and stagnant sales growth.