Truck Sales Development Heavy Trucks
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Volvo Investment trip, Wroclaw, May 14-15, 2007 VolvoVolvo TrucksTrucks inin EasternEastern Europe Europe Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Your perception? Iron curtain One party system Communism Superpower KGB Plan economy Corruption Crime Orphanage Balkan war Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Eastern Europe Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Area Other eastern Europe India China Russia USA Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Beginning 1995 • 14 persons in Goteborg • 45 persons in Poland, Czech rep and Hungary • Rep office Russia 1 person • Rep office Turkey 1 person • Sales financing 30 Msek • Invoiced units 2,660 trucks Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Strategy • One national sales organization, local presence • Strategic service points managed by Volvo Trucks representing 50 % of aftermarket business long-term • Other service points – mainly independent workshops Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Truck manufacturers Roman Jelcz Volvo Liaz Scania Raba Mercedes-Benz Fap MAN Tam Daf Kraz Renault Kamaz Iveco Maz Star Tatra Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 20062006 • Established in 22 countries • Invoiced units 11,080 Est Russia • Very strong profitability Lat Kazakhstan • Strong cashflow Lith Belarus Kyrgyz Poland • 1,550 employees Czech Ukraine Tajik Slvk Uzbekistan Hung Mo SnCr Rom Bs Georg Turkmenistan Sb Bulg Ar Azerb Mk Al Turkey Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Volvo market shares Heavy trucks Latvia Romania 50 30 40 20 30 20 Volvo 10 10 Scania 0 Mercedes 0 Poland Daf 30 Russia Iveco 40 MAN 30 20 Renault 20 10 10 0 0 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 YTD YTD Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Weekly order intake 800 700 ☺☺ 600 500 400 300 200 100 0 2003 2004 2005 2006 2007 Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Customers Customer structure Total offer Old communist Value Multi-nationals Service net Western European Image Local companies Relations Modern local businessmen Financing Complete units Sales performance Units per salesperson Sales districts Product range increased VolvoVolvo TruckTruck Corporation Corporation 22700 AN, 2007-05-11 Volvo Investment trip, Wroclaw, May 14-15, 2007 International transport Poland • Present fleet 285 Volvo Trucks • 40 Volvos ordered • Financed by Volvo • Strong in automotive transport (GM) • Manage sensitive glass transport (Pilkington) Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Long-haulage Hungary • Present fleet 1,200 Volvo trucks • 1,000 Volvos ordered for delivery 3 coming years • Operates Volvo authorized workshops • Expansion into Romania, Bulgaria and Poland • Operates logistic center in Hungary • Long history with Volvo • Ambition to grow stronger and larger Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 National transports Romania Status • Present fleet 900 Volvo Trucks • 350 Volvos during delivery • Financed by Volvo, 45 MEur • Equipped with Dynafleet • Forced buy-back • Trade-ins Future • Fleet of 2,500 heavy trucks in 2009 • Entering distribution and construction segment • Develops logistics, land purchased • Expands into Moldavia, Bulgaria, Ukraine and Serbia Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Construction Russia Established 2002 3,500 employees Profession – road and airport construction Truck fleet – 220 Volvo and 100 Kamaz 500 units subcontracted Volvo purchase 2006 – 120 Volvo FM construction units Planned purchase 2007: 250 construction units Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Products Complete new product range Keep price leading position Soft offers Increased focus Sales organisation awareness and knowledge Product strategy to secure profitability short-term and long-term Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Volvo Financial Services Products Financial performance • Cross boarder • Penetration up to 60% • Financial lease • Remaining 40 % is mainly cash • Installment credit • Portfolio 6,500 Msek Portfolio quality very good with low Establishments • loss ratio • Seven local finance companies • Sales finance managers in all Volvo Truck sales offices • Follows Volvo Trucks local presence OneOne team,team, oneone offeroffer forfor thethe customercustomer Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Vehicle population Present vehicle population: 103,000 Volvos Maintain market leader position in terms of vehicle population Capitalize on vehicle population Security for investments Build profitable population Secure profitability short and long-term Provide partners with business opportunities Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Aftermarket Workshop net • 34 own workshops • 116 private workshops Coverage • To customer needs Business performance • Good Mindset • Change from Aftermarket to Commercial aftermarket Investments • Own workshops and private – same standard Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Image Very strong brand image Constant improvement to maintain position Wanted position is No 1 Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Market outlook Strong and fast development of GDP Substantial foreign investments Major investments in infrastructure Increased consumption EU entry – Romania and Bulgaria Increased access to funding 480 million inhabitants High oil prices Large demand for modern transport equipment Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Strong GDP growth GDP/capita (USD) 25 000 Western Europe average 2006 = 35 738 20 000 15 000 10 000 5 000 0 2006 2007 2008 2009 2010 Bulgaria Romania Russia Poland Lithuania Latvia Czech rep Source: Global Insight Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Private Consumption Growth 170 2003: index 100 160 2001=Index 100 150 140 130 120 110 100 2004 2005 2006 2007 2008 2009 2010 Bulgaria Romania Russia Latvia Lithuania Poland Czech rep Source: Global Insight Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Infrastructure Investments Bulgaria 4,300 MEur Ukraine 9,105 MEur 2010-2013 Romania 11,600 MEur Poland 8,100 MEur Serbia 1,900 MEur Lithuania 128 MEur Russia 108,000 MEur Hungary 517 MEur Road network Bulgaria 85 Ukraine 28 density Romania 26 Poland 97 km/100 sq km Serbia 28 Lithuania 108 Russia 38 Hungary 76 EU norm 110 Investments anticipated to continue on high level Source: Global Insight Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Helsinki Nizhniy Novgorod Pan-European St Petersburg transport corridors Moscow Berlin Minsk East-West trade Warsaw Kiev Transport efficiency Lviv Wien Important for Odessa economic growth Belgrad Bucharest Constanta Investment in Black Sarajevo Varna Sofia Sea ports Skopje Istanbul Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 It'sIt's notnot justjust aa walkwalk inin thethe parkpark Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Road transport goods volumes Indexed 180 160 140 Eastern Europe 120 Western Europe 100 80 60 Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun 2003 2004 2005 2006 Source: Eurostat Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 AutomotiveAutomotive industryindustry Skoda Honda Renault Suzuki Toyota Dacia Fiat PSA Hyundai VW GM Mercedes Ford KIA Daewoo Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Total market heavy trucks Total market Growth Total market Growth 2006 vs 2005 2006 vs 2005 Bulgaria 1,650 107% Poland 11,360 45% Croatia 1,080 27% Romania 5,070 59% Czech rep 6,260 14% Russia 9,080 92% Estonia 1,340 94% Slovakia 3,330 31% Hungary 3,780 14% Slovenia 1,670 39% Latvia 1,950 99% Turkey 38,730 0% Lithuania 2,690 20% Ukraine 1,200 102% Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Growth in Eastern Europe Total market, heavy trucks 180 000 160 000 Growth 140 000 2006-2010: 120 000 ≈100% 100 000 80 000 EU 17, 2006: 60 000 263,000 units 40 000 20 000 0 97 98 99 00 01 02 03 04 05 06 07 08 09 10 Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Truck sales development Heavy trucks units 12000 10000 Future? 8000 6000 4000 2000 0 2002 2003 2004 2005 2006 Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Russia market size Heavy trucks 55000 50000 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 2000 2001 2002 2003 2004 2005 2006 Imports (new and used) CIS brands Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Volvo position in Russia Sales of new and used heavy trucks 8000 7000 6000 5000 New 4000 Used 3000 2000 1000 0 Volvo MAN Scania RVIFreight- Freightl Iveco MB DAF InternatInter- Tatra Other liner national Volvo Truck Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Factory in Russia Present assembly capacity in Zelenograd, 500 Volvo trucks/year Volvo Trucks invests in a new assembly facility in Russia Capacity 10,000 Volvo trucks/year Estimated completion 2009 Expected location Kaluga Volvo Truck Corporation Volvo