Strong brands are important assets
Since taking the strategic decision to focus on commercial vehicles, the Volvo Group has built a strong portfolio of brands. Through direct ownership, licenses and joint ventures, the Group has access to a range of iconic and industry-leading names like Volvo, Mack, Renault Trucks, Volvo Penta, Nova and Prevost.
On the truck side, current product brands include Renault Trucks, Mack, UD Trucks, Volvo, as well as Eicher through the joint venture with Eicher Motors in India.
Volvo and SDLG branded construction equipment, Volvo, Sunwin (in a joint venture in Shanghai), Prevost and Nova branded buses and Volvo Penta marine and industrial engines make up the major product brands in the business areas.
Portfolio structure unlocks hidden potential
Leveraging our brand portfolio to increase market coverage is at the center of the new Group organization. The Volvo Group has gone from a decentralized brand-by-brand strategy, to utilizing a brand portfolio perspective.
By clarifying the purpose of each brand in the Group portfolio, we are going to increase market coverage and be able to strengthen relations with a broader customer base. This has meant taking a holistic approach to the markets, while previously each truck brand operated relatively independently and often towards the same customers.
Furthermore, we will be able to better utilize the other strategic assets we have built over time – global scale, industrial footprint, distribution networks, supply chains and customer relationships.
Specific segments and customers
During the past two years, the prerequisites to execute on a brand portfolio strategy have been worked on extensively within Group Trucks. This includes a common approach to market segmentation and linking various aspects of customer buying behavior to the individual brands. Every brand within the Volvo Group has a purpose and delivers a value proposition to a specific group of customers around the world.
At a global level, Volvo and Mack represent our premium brands, aimed at customers who choose a holistic view of the brand and associated product and service offer. Renault Trucks is positioned in the high-end space addressing customers who value total operational cost and network support. Outside of Japan, UD Trucks addresses the value segment, a new focus area for the Group, while UD Trucks in Japan is in the high-end segment. Eicher, which currently services the Indian market, will form the basis of the Group offering in the highly cost-competitive market segments.
With each truck brand being assigned a specific segment and customer base, Group Trucks can increase its market share and contribute to the overall growth of the Volvo Group. The brand-positioning project has also provided valuable input when the Group Trucks organization designed road maps to reach their strategic objectives.
New segments - new potential
Growth markets are an important part of the Volvo Group’s strategy. These markets are drivers of long-term global growth and they offer a great deal of potential for quality trucks which balance operational cost with purchase price. We define this space as the value segment and are increasing our presence in this segment of the market.
UD Trucks has launched the Quester, Volvo Construction Equipment’s SDLG brand is excelling, Volvo Buses is developing a bus for the value segment and Volvo Penta’s sales of both industrial and marine engines are increasing in these market segments.
To succeed in the value segment various aspects of the business – from design to distribution – are being addressed. The investments in SDLG and the recent launch of the new UD Trucks branded heavy-duty truck range, the Quester, is a huge investment that establish a new platform targeted to this space and demonstrates the Group’s commitment to the value segment.