Development by continent – Europe
Change-over to new products
Varying market conditions
In 2013, the heavy-duty truck market in Europe 30 (EU’s 28 Member States plus Norway and Switzerland) increased to 240,200 heavy-duty trucks compared with 221,800 in the preceding year, with a positive impact from a number of customers, primarily in the second half of the year, choosing to prebuy new trucks before the transition to the new Euro 6 emission regulations. These new regulations entail considerable reductions in nitrogen oxide and particulate emissions, as well as a price increase by truck manufacturers to offset the more advanced technology required.
The European market for construction equipment, measured in number of machines sold, declined by 4% in 2013 compared with the preceding year. The market showed signs of stabilizing at low levels in the autumn.
The European bus market in 2013 was at the same low level as in 2012, with continuous price pressure as a result.
The market for leisure boat engines remained very weak while the performance of industrial engines was better, for example, due to higher demand for diesel-powered gensets in Western Europe.
The performance of the Group’s truck operations was split in terms of market shares in 2013. Volvo strengthened its shares, boosted by the strength of its new products that were available with both Euro 5 and Euro 6 engines. Volvo held a market share of 16.3% (15.6) in the heavy-duty segment. Renault Trucks’ market shares in heavy-duty trucks declined to 8.0% (10.1), one of the reasons for which was the transition to the new trucks, which were only available for customers to test at the end of the year. The Group’s total market share in heavy-duty trucks amounted to 24.3% (25.7).
New trucks and new engines
Starting with the Volvo FH in autumn 2012, the Volvo Group’s truck operations underwent an extensive process of product renewal in 2013, with the launch of brand-new Volvo FM, Volvo FMX, Volvo FL and Volvo FE. In May, Volvo introduced new trucks with a Euro 6 engine program ranging from the smallest medium-duty 5-liter engine to the heavy-duty 13-liter version. In June, Renault Trucks presented a new, comprehensive truck program comprising its T, K, C and D series for long-distance haulage, construction and distribution.
In the autumn production was more and more switched over to the new trucks at the same time as the European system gradually changed to Euro 6 engines, primarily for Volvo Trucks. This led to greater complexity and higher costs for production since both the old and new generations of trucks were manufactured in parallel. The launch of the new products also entailed higher costs.
Restructuring of the truck operations
On January 1, 2013, the Volvo Group introduced a new organization for its sales and marketing of trucks in Europe, the Middle East and Africa (EMEA). The reorganization aims to capitalize more effectively on opportunities for the Group’s brands and products and to lower costs. The reorganization also entails an optimization of the dealer and service networks in Eastern and Central Europe was carried out, with the aim to considerably increase the service availability, primarily for Renault Trucks. The number of service points is expected to increase by 30–40% for Renault Trucks and by 10% for Volvo in this part of Europe.
In October, a strategic decision was made to implement changes in the European truck manufacturing operations in order to increase efficiency and strengthen competitiveness. The goals are to gradually, over the next two years, relocate the cab trim operations from Umeå to Gothenburg, Sweden, to concentrate the manufacturing of heavy-duty trucks to one assembly line in Gothenburg and to concentrate the assembly of medium-duty trucks to Blainville, France.
During the year, Volvo Buses’ entire product program underwent a major upgrade. The most significant change was the three brand-new Euro 6 engines. The model program was also strengthened with a new hybrid articulated bus with fuel consumption that is up to 30% lower than current diesel models. Volvo Buses also started field tests with its first plug-in hybrids in Gothenburg in May. The technology means that energy consumption can be reduced by a full 60% compared with current diesel buses.
New engines from Volvo CE and Volvo Penta
During the year, Volvo CE introduced engines that meet the new emission requirements in both North America and Europe, Tier 4 Final/Stage IV. The engines improve fuel economy by up to 5% compared with earlier models and reduce total running costs.
Also Volvo Penta has upgraded its industrial engines, and a full series from 5 liter up to 16 liter with Tier 4 Final/Stage IV technology will be offered from 2014.
As the second largest market in Europe, Russia is one of Volvo CE’s core regions for long-term growth. In May, Volvo CE opened a 20,660 square meter excavator plant in Kaluga in Russia. The plant represents a SEK 350 M investment and has been developed using technology to reduce carbon emissions. It is the Volvo CE's first plant in Russia.