Focus Brazil

Chapter in PDF

Successes in Brazil manifested at Fenatran

The exhibitors were out in numbers at the major Fenatran Trade Show in São Paulo, Brazil in October 2013, but the question is whether or not Volvo Trucks stole the show. With a total of 70,000 visitors to the show, 17,000 to the Volvo exhibition, thousands and thousands of new orders and a great deal of attention directed at Volvo’s 2,500 square-meter stand, the biennial Fenatran confirmed the successes of the Volvo Group in the Brazilian truck market.

The Volvo Group displayed a number of exciting products and services, including the world’s most powerful truck, the Volvo FH 16, with a 750-horsepower engine, the updated Volvo VM series, now also in 8x2 and 8x4 configurations and with I-shift transmission, and a Volvo FM that operates on LNG – the first natural-gas truck to perform field tests in Brazil.

- To be able to fully display the engine in the Volvo FH 16 750, there was a shared booth with a glass floor to clearly show the engine installation. Interest in viewing the booth was so great at times that the queue stretched to the companies with displays closest to us, says Roger Alm, Head of Group Trucks Sales and Marketing in Latin America.

Key market
Demonstrating new products to customers and other stakeholders is an important part of Fenatran, but the Trade Show is more than that. The Volvo Group and dealers worked together to sell trucks, financing, insurance and Gold service contracts at the point-of-sale in the Volvo display, strongly reflecting the Volvo Group strategy to deliver an integrated total offer to customers. Business activities were high and during the five-day show the number of truck orders signed was similar to the amount usually signed during a full quarter.

Interest in Volvo Trucks is huge in Brazil, which is by far the largest truck market in South America, with 103.800 heavy-duty trucks registered in 2013, and very important for the Volvo Group. In recent years, the market shares have gradually increased in the largest country in South America, from 12.8% in heavy-duty trucks in 2008 to 20.0% in 2013. And, this occurred in 2013 with positive price realization. It is also very positive that the new Volvo VM series repeated successes in the medium-heavy segment. Market share in the segment increased from zero ten years ago to 12.0% in 2013. During the year Volvo was named "Most desired brand" in Brazil coming out on top in customer satisfaction and image.

Positive outcome
The Brazilian government has a program, Finame, with advantageous government financing for investments in trucks and construction equipment. Towards the end of the year, there were some uncertainty concerning future lending-rate levels in Finame and worry about rising inflation pressure. Since then the Finame rate has been set and many signs indicate that the Brazilian market will remain at a level of approximately 105,000 heavy-duty trucks in 2014. The positive factors include somewhat improved economic growth, an excellent harvest, general investments in infrastructure, the Soccer World Cup, which is driving both investments and consumption, as well as the scrapping program in some states.

Volvo VM, designed specifically for the South American market, was updated in 2013. The Volvo VM is a medium-heavy truck suited for various regional and distribution operations. 

Position of strength to improve further
The favorable trend in the Brazilian market has resulted in an increasing number of the global truck manufacturers focusing their attention on the country and deciding to invest in manufacturing there. To benefit from Finame requires that a large proportion of trucks, measured in value, are manufactured in Brazil. However, the successes of the Volvo Group in Brazil are the result of many years’ hard work by the Group’s employees and the employees of the independent dealerships. The increasing competition is handled from a position of strength in terms of both image and customer satisfaction. But, it will require continued investments in the 12 sales districts, of which two are driven by the Volvo Group and ten by independent companies.

- To support our customers, we will continue to strengthen our service network. In 2010, we and our dealerships had 75 facilities with approximately 1,000 service stations. At the end of 2014, we anticipate we will have a combined amount of 100 facilities and more than 2,000 service stations. We are expanding with our customers, says Roger Alm.