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Volvo Trucks:Penetrating the US Market Presented by: Akhilesh Nair Jyoti Mehta Mehul Jindal Murali Mudambi Prarthana Verma Sriram Thwar
About Volvo Group• European heavy truck manufacturer, best known for cars• First passenger cars introduced in 1927• Trucks added to the product range in 1928• Later diversified, having product ranging from cars, trucks, buses, jet engines and marines• Mid 1975, focused on penetrating into US market Product, 0 Others, 24• Corporate sales in 1998, $27B Cars, 48 Trucks, 28
About Volvo Group(Cont.)• Sold off car business to Ford, in 1999• Manufacturer of transport solutions for commercial use• Market share in 2000, 10.6% in US & 14.9 in Europe
Reasons to enter US Market• Presence in US will result into a “GLOBAL PLAYER”• Attractive opportunities offered by US Geography & Transportation business for a player like Volvo• Highest sales of 45% in 1980 compared to other regions• Result into to a global advantage over its competitors not only in US but also show a strong position over its European competitors
Penetrating Strategy• Maintain dealership, acquisition, integration & producing premium products: o Initially, sold medium trucks through existing dealer networks of cars focused only to 13 major states in 1975 o Teaming up with Freightliner in 1978 which ended early o Acquired bankrupt White Motor Corp.(WMC) for $70M in 1980• Customer Focus Strategy by improving customer & dealer relations• Integral Sleeper vehicles (having driving & sleeping compartments)• Maintained White/AutoCars Name plate to portrait as US brand• Communication Strategy to convey VWMC’s changed ownership & better quality
Penetrating Strategy(Cont.)• Acquiring GM’s truck business to push up sales in 1988• Positioning as a new brand called “WHITEGMC”• Introduction of “Volvo Financial Services” in 1995, focusing on flexible finance and lease options for Volvo Group dealers and customers• Invested in production, marketing & operational changes for launching new VN series• Increase in the proportion of Volvo engines in the market
Reasons for Failure• Difference in basic configuration of the products o US Customer demanded for conventional trucks , while European had Cab-over designed trucks o US had gasoline engines while European offered Diesel engines o US driver favored unsynchronized gearboxes while European offered synchronized gearboxes• Unwillingness to acquire technological leader Freightliner, in 1980• Acquiring of relatively weak brands such as WMC and GM• Irregular investment of money in few sectors
Recommendations for 2000 Entering further into global markets such as Asia & Africa Inaugurating new operational offices to strengthen its global presence Collaboration with local business partners o Local manufacturing o Sales and distribution Coordination o Coordinated for common brand name & product development Decentralization o Dispersed for adaptation of local culture, regionalization of processing and assembling facilities Developing more fuel efficient vehicles Provide full-service leases, finance leases, contract maintenance agreements and rentals Developing customer care centers for help in case of an emergency breakdown
Current Market Share (2011) Market Share in US & Canada* *Source: Volvo Webpage
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