Development by continent – Asia
Expansion in Asia
Restructuring in Japan
In Japan, the total market for heavy-duty trucks in 2013 rose by 6% to 33,800 vehicles (32,000) as an effect of government incentives to stimulate the economy, significant investments in public construction projects and a weaker currency that increased the competitiveness of the export industry. UD Trucks' market share in the heavy-duty segment incresed to 18.7% (17.5).
The Japanese market is one of the Group’s largest, due, amongst others, to high sales of service and spare parts. At the same time, the Japanese market has declined sharply since the peak years of the early 1990s and the Group is carrying out a number of activities to strengthen the performance in the country. Measures are being taken to lower costs and enhance efficiency in the sales channels within the framework of the REX, Retail Excellence, program which includes reducing the number of employees in support functions while increasing the number of employees who generate income.
A program was announced at the start of 2013 aimed at improving the overall efficiency of the Japanese production system. The program involves consolidating manufacturing to the main plant in Ageo and reducing production capacity in both engines and truck assembly.
In January 2013, AB Volvo signed an agreement with the Chinese vehicle manufacturer Dongfeng Motor Group Company Limited (DFG) to acquire 45% of a new subsidiary of DFG, Dongfeng Commercial Vehicles (DFCV), which will include the major part of DFG’s medium and heavy-duty commercial vehicles business. The transaction was approved by the Chinese National Development and Reform Commission (NDRC) in January 2014 but completion is subject to certain conditions, including the approvals from other Chinese authorities. The deal is expected to be finalized in mid 2014.
During 2013, the Chinese market for heavy-duty trucks totaled approximately 774,100 vehicles, while the corresponding figure for the medium-duty market was 286,800 vehicles. DFCV occupies a strong position in both the heavy-duty and medium-duty segments, with deliveries of 120,631 heavy-duty trucks and 50,995 medium-duty trucks, corresponding to market shares of 15.6% and 17.8%, respectively.
Eicher Pro Series - a strategic milestone for VECV
In 2013, the total market for commercial vehicles over 5 tons in India declined by 25% to 297,100 trucks (394,700). The Volvo Group’s joint venture with Eicher Motors, VE Commercial Vehicles (VECV), significantly outperformed the market. VECV’s deliveries of Eicher vehicles decreased by 16% to 40,550 units (48,262) and the domestic market share subsequently increased to 13.8% (12.7), the highest to date. In buses, Eicher’s share rose to 13.5% (12.0), while it remained overall stable in the medium-duty and heavy-duty segments at 30.4% (31.4) and 4.4% (3.9) respectively.
VECV has made extensive investments in recent years, which have been financed by the company’s own cash flow. They include a new factory for medium-duty engines that delivers to the entire Volvo Group, a new paint shop, new cab line, tooling for new products, new gear plant and a new facility for bus body building. Investments were also made in research and development related to new products. The results of these investments were seen in December with VECV’s launch of the Eicher Pro Series, developed specifically for India and other selected emerging markets. The Eicher Pro Series covers the entire 5 to 49 ton gross vehicle weight (GVW) range. A stepwise rollout of the Eicher Pro Series began in February 2014.
Volvo CE advances positions in China
The vast majority of net sales in China stem from the sale of construction equipment. The Chinese construction equipment market recovered in the autumn of 2013 after a period of weak development. The market increased by 3% (decline: 37). For Asia excluding China, the market increased by 2% (11).
With a volume totaling 256,200 wheel loaders and excavators in 2013, the Chinese market is by far the world’s largest market, and the Volvo Group remains number one in these segments. During 2013, Volvo CE with the brands Volvo and SDLG had a combined market share of 14.6% (15.0) in wheel loaders and excavators.
In December, Volvo CE signed an agreement to acquire the hauler business from Terex, a transaction that is expected to be completed in the second quarter of 2014. In addition to strengthening Volvo CE’s penetration in the core earthmoving segment, the acquired business will extend the company’s presence in light mining. The deal also includes a 25.2% holding in Inner Mongolia North Hauler Joint Stock Co (NHL), which manufactures and sells rigid haulers under the Terex brand in China with a leading position in the market.
Strong positions for Volvo Buses
Volvo Buses has a strong position in India and is one of the most well-known brands in the market. 5,000 buses from Volvo are in operation in India. In 2013, preparation for the introduction of a value brand on the Indian market was initiated.
During the year, Volvo Buses delivered its first low-floor city buses to Shanghai. China is a large market for electric buses. Sunwin Bus, a Volvo Buses and SAIC Motor joint-venture, delivered 311 fully electric
buses on the Chinese market in 2013.
UD Quester for emerging markets
On August 26, UD Trucks launched Quester, a new heavy-duty truck range developed specifically for emerging markets. With Quester, the Volvo Group will address a completely new customer segment and the trucks are an integrated part of the Volvo Group’s strategy to increase sales in emerging markets across Asia Pacific and other regions. Read more about UD Quester.