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The Volvo Ocean Race (VOR) is the amazing race in real life. It brings a host of interesting and exciting aficionados, celebrities and industry captains to the shores of Cape Town where they can participate in and witness the arrival and departure of these phenomenal vessels that challenge living life at the extreme for a 120 days or more.

Among the dignitaries spending some time in Cape Town during the exciting time just ahead of the commencement of the second leg of the 2005/2006 VOR was Staffan Jufors, president and CEO of Volvo Trucks worldwide since November 2004 and member of the executive committee for the past seven years.

FleetWatch was given an exclusive opportunity to meet with Staffan Jufors and Anders Lindblad, the recently appointed area director of Africa, the Middle East and MD of Volvo Truck's South African operations for an impromptu discussion on a variety of trucking and related issues including some of Volvo's plans for its South African operations. Max Braun tells the story about this compelling event and his chat with Staffan and Anders over a breakfast on a stunning morning on the banks of Cape Town's Granger Bay.

Volvo, the second largest truck builder in the world and no stranger to South Africa, celebrated the 2005 year with an all time record production of more than 100 000 units in a single year. Volvo achieved record-breaking unit sales in each of the past two years.

Volvo Trucks, a major player in the global trucking industry, is part of the respected Volvo Group that holds an important stake in the production of passenger buses, construction equipment, marine engines, components for the aero industry and a large logistics business.

The first Volvo truck was built in 1928. The company specialised in vehicles with a gross mass greater than 16 tons. On the local front, it was in 1951 that the Lawson Motor Group obtained the rights to sell Volvo trucks in South Africa from its old University Filling Station premises in Braamfontein.

History quotes Wilfred Lawson as saying "the trucks found ready acceptance, unlike Volvo cars of the day that had an awkward look about them". Cargo Carriers was an early user of Volvo trucks, around the time they undertook the onerous Randfontein contract on the then West Rand. Bernard Kearney was the national manger responsible for the sale of the memorable N86, N88 and F88 and F89 models.

But back to the present: With an increase of 26% in the sale of Class 8 units in 2005, Volvo holds around 10% of this important market segment in North America. Sales achievements in Western and Eastern Europe, South America, Asia and the Middle East continue along similar growth paths. Before talking about South Africa in particular, we asked Staffan his view of Global markets in 2006.

SJ: We are optimistic about the US market. We are confident it will continue to show good growth in 2006. Our VT880 range that has been specially developed for the US market and built in America is doing well. There is an increasing demand for the Volvo engine and driveline. The VN is particularly popular with US drivers. This year most of the drivers nominated for the various categories in the annual driver competition chose Volvo.

FW: What's your outlook for Europe and Asia in 2006?
SJ: Much the same. We see an on-going good demand for the type of vehicles we build.

FW: Volvo's joint venture with the China National Heavy Truck Corporation (CNHTC) in China is well underway. Which models will be built there? Will they be exported? And which engines will be used?
SJ: CNHTC will build some FM models and the FH12. For the foreseeable future the vehicles will be sold in China to meet the strong demand for trucks. We chose to build engines there to ensure our Chinese business has access to competitively priced engines. Also, to sub-contract the manufacture of engine components for our global business as well as the business in China.

FW: How are you coping with the strain China and India are putting on the demand for raw materials and commodities, especially steel and natural rubber?
SJ: This is a problem for all truck manufacturers, not just Volvo. There is no doubt that the increasing price of raw materials will have to be passed on to the operators.
 

VOLVO CHIEFS Caught in relaxed mood in Cape Town by FleetWatch correspondent Max Braun were Staffan Jufors (left) President and CEO of Volvo Trucks and member of the Executive Committee for the past seven years and Anders Lindblad, area director for Africa and the Middle East, and newly appointed CEO for Volvo South Africa. Anders has held several senior management positions during the near 30 years he has been with the Volvo Group. These include marketing manager Volvo Data AB, director of business development Volvo Truck International, president Volvo Peru, and area director for the Andes countries.

FW: What is the situation with the Scania shares held by Volvo and do you have, or want to have any influence over what Scania produces?
SJ: The matter with Scania has been resolved. The Scania shares previously held by Volvo have been passed on to the Volvo shareholders. We, at Volvo Trucks, have no influence over Scania - nor would we want to.

FW: Of more interest to South African transporters and operators: what are your plans for Mack and Renault?
SJ: As far as South Africa is concerned, you will be pleased to know that we are in the process of revitalising Mack and will shortly announce the full details of our plans. We believe there is a viable market for Mack in South Africa; this especially so now that the South African government is putting considerable weight behind the infrastructure and the 2010 World Football Cup. These are encouraging developments for the construction industry where Mack does well. This market may well remain strong until 2009 or even 2010. We recognise that access to service and maintenance has, in the past, not been up to expectation for Mack customers. Including all Mack maintenance and technical back up in our Volvo company-owned dealerships will rectify this. Regarding Renault. Businesses like Renault that are part of the Volvo Group are mandated to determine their own strategies. Its board of directors will decide what happens with Renault in South Africa.

FW: The appointment of Anders Lindblad in his capacity as area director for Volvo Trucks Africa and Middle East is a huge bouquet for South Africa. To have such a senior manager heading up your South African operations alongside his broader responsibilities confirms you have confidence in the South African economy and no doubt some special plans for the future.
SJ: Yes we are confident that the South African truck market will continue on its growth path for a good few years. We see opportunities for our various model ranges. Let Anders answer some of your questions.
 

WITH THE construction industry on the rise, Staffan Jufors, president and CEO of Volvo Trucks worldwide believes there is a viable market for Mack in South Africa as it is in the construction arena that Mack really shines. Details of revitalisation plans for Mack will be announced shortly he says.

FW: While you must be reasonably satisfied with your FH sales, your FM and particularly the FL range needs to do better.
AL: Yes, FH and FM sales are steady. Towards the 2nd quarter of 2006 we will introduce an additional model within the FL range. Much of our focus and attention will be on customer service in the full sense of the word. This includes tradeability and its impact on resale values. Used Volvo trucks in good condition are a good buy for those operators looking for quality vehicles that are reliable and not too expensive to operate. Sometimes this is better than buying a new truck that is not suitable to do the work.

It is my intention to visit and meet with as many Volvo users as I can. We will also communicate regularly with all roleplayers in the trucking business. As is known, we are in the process of relocating our assembly plant in Botswana to Durban and this transition will be complete by the end of March. The new plant will be state-of-the-art in respect of equipment, IT, manpower and training facilities. It marks a major development in Volvo's deepening footprint in South Africa and the Region.

ANDERS LINDBLAD sees accent on the tradeability and resale value of used Volvo trucks as being an important component in the overall arena of customer service. Quality, reliability and cost effectiveness are the key words here.

FW: In recent times Volvo has been making inroads into major private carrier fleets; Parmalat South Africa, the mega dairy group, and Liebentrans the long-haul and regional distributor of largely refrigerated products are examples. With the on-going growth in third party distribution and vertically integrated groups such as Imperial and to an extent, the Super Group, what are the odds on Volvo establishing a local presence of its Logistics business?
AL: Volvo will not enter into the logistics business in the way that the above mentioned companies operate. Volvo's core business is concerned with the supply of a quality range of products directly to transport customers so that they may in turn offer services to their customers. In terms of our own internal logistics operations - a large piece of ground adjacent to our Gauteng premises has been acquired and the development of a new parts supply centre is underway.

FW: What surprises await us at this year's Hannover Truck Show?
SJ: Let's just say that surprises there will be. The best way to find out is come and visit us at the Show.