As Volvo Trucks launches an updated line of heavy-haul trucks aimed at growing its presence in North America, the Swedish truck maker is also focused on adding connectivity, electrification and automated vehicle technology to its trucks.
Magnus Koeck, vice president of marketing and brand management of Volvo Trucks North America, spoke to Trucks.com about the trucking industry and the company’s plans.
This year is good for Class 8 heavy-duty truck sales. What about next year?
We believe that 2019 is going to be a good year, as well. I would say we probably won’t see a massive growth from 2018 to 2019, but we believe it will continue to be strong into 2019.
What segment of your business will grow the fastest in 2018?
Significant growth will come from the long-haul business. Last year, with U.S. and Canada combined, our long-haul segment was close to 43 percent [of Volvo’s North American sales]. We expect that to grow to roughly 45 percent this year.
Are trucking companies adding capacity or mainly replacing aging equipment this year?
Most of our customers are replacing trucks. We hear that the driver shortage is stopping or preventing our customers from growing because they just can’t get drivers. This might hold back the long-haul segment a little bit.
What is Volvo’s sales projection for its new VNX heavy-haul line in 2018?
This is a segment where we need to earn our credibility in. If we can sell around 500 vehicles to start with, I think that’s a good start. We are quite modest in our projections. For sure, it won’t be the massive sales volumes we have sold with our VNL (long haul) and VNR (regional haul) trucks launched last year.
How would tariffs on steel and aluminum proposed by the Trump administration affect Volvo?
We are monitoring that pretty much daily, but I can’t say anything yet. But, inevitably, it would affect us — that’s clear.
What’s happening with diesel engines and where is the market headed?
There is a debate that’s going on a lot in some major cities around the globe to restrict diesel, but I would say that diesel will indefinitely be the predominate fuel for many, many years in the future. I think we will see diesel in combination with other hybrid solutions first, and in the long run, we will, of course, see more and more electric vehicles.
How focused is Volvo on electrification?
We have sold 3,000 Volvo buses that are electrified. Here in North America, diesel fuel is still cheap compared to most parts of the world – it’s quite expensive in Europe. So, the payback time for electric vehicles in Europe is much shorter. That’s why we will probably see electrification in other sectors earlier on in Europe because it’s not sustainable yet for our customers here to go that route. The payback time will be too long.
When will Volvo test its first electric truck in North America?
Stay tuned. We have a lot of exciting things planned, but I can’t go into any details about when it will happen. We have lots of resources and a lot of people working on this. We are well-prepared and suited for introducing electric trucks in North America in the future.
We have already showcased this technology in Europe, including a fully autonomous truck operating in mining operations, as well as one in refuse and another one at a sugar plantation in Brazil.
I would say the technology is there and we will definitely be ready when the market is ready. I think the biggest challenges include discussions about safety, legislation to allow self-driving trucks and public acceptance. We have demonstrated that we can do it. First, we will see it in confined areas and then eventually it will expand to over-the-road and highway applications and so on.
Uber is running tests on some of our trucks, which they showcased recently. We are in the business and will be ready.
How far off is platooning – where groups of trucks travel close together to save fuel – and when will it be commercially viable?
We are running tests in Europe and North America and other parts of the world, as well. The technology is pretty much there. I would say platooning has more of a chance to come to the market first than fully automated vehicles.
A prerequisite of platooning is, of course, connectivity. We have that already today. Connectivity has already started to change trucking. We have more than 150,000 connected trucks that have remote diagnostic tools and remote downloading that includes over-the-air programming. You will hear more from us this year on platooning. I don’t want to speculate on timing, but we are running tests this year.