Volvo Construction Equipment

Volvo CE: 'Good Distribution Insufficient to Succeed Today'

In a presentation entitled 'Product renewal key to success in strengthening market' the new president and chief executive of Volvo Construction Equipment, Pat Olney, used his first speech to the global press to state that the company is well positioned to benefit from buoyant markets, thanks to a massive product renewal program and significant investments in its industrial structure.

Olney, speaking in Sweden on May 24th to an audience of 100 leading international trade press journalists, said: "With recoveries now gaining speed in our traditional markets of Europe & North America and continued strong growth in BRIC markets (Brazil, Russia, India and China), the prospects for the industry are brightening for those equipment companies with a global industrial and distribution footprint. But although necessary," he continued, "Good distribution is insufficient to succeed in the new-look construction industry. To prosper you have to offer customers products that are much closer suited to their local needs, resources and applications – and this requires a significant rethink of the traditional product offering."

To emphasize the point, along with outlining an investment program that runs into hundreds of millions of dollars, Olney also highlighted more than 50 innovative new products that are being introduced in 2011. "It is this combination of reliable, fuel efficient and appropriate products, high production quality and strong aftermarket support that are customers' order winning criteria today. With these in place Olney said he believed that Volvo CE was 'particularly well positioned' to capitalize on the continued growth in the major markets.

Volvo CE, which now claims to be the third largest manufacturer in the global industry, has enjoyed strong growth in recent quarters. In the three months January to March 2011 the company's sales increased by 53% (SEK 15,759 M) and profitability by 70% (SEK 1,708 M). In addition, Volvo also says it became the market leader in wheel loaders and excavators in China in this year's first quarter. The company has also introduced in recent months a widespread product renewal program, with the introduction of Tier 4i/Stage IIIB emission compliant machines that not only emit lower emissions but offer higher productivity and improved fuel economy.

"In addition to developing fuel efficient products, we will continue to capitalize on our strong position in Europe and North America, while at the same time expanding our industrial footprint in the BRIC markets," concluded Olney. "It's good to remember that we remain in a cyclical industry – so we will also concentrate on maintaining a high level of flexibility in the production system."