Volvo 2011 Annual Report Download - page 22

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A GLOBAL GROUP 2011
Old trucks create replacement demand
One of the effects of the relatively weak North American
market for heavy-duty trucks during 2007 to 2010 is that
the truck fleet has become increasingly old. Generally,
older trucks bring with them an increased need for service
and repairs and thus increased costs for truckers. In spite
of the investment a new truck entails, in many cases it is
more profitable to buy a new truck to lower the total cost
of ownership. Against the background of a truck fleet that
is at its oldest in many years, there is a need to replace old
trucks with new ones at many haulers.
Volvo CE invests in North America
Over the next couple of years, Volvo Construction
Equipment (Volvo CE) plans to spend USD 100 M in its
Shippensburg, Pennsylvania, USA manufacturing facility
and start production of Volvo wheel loaders, excavators
and articulated haulers in North America. Also, the Volvo CE
North American sales headquarters and Volvo Rents will
relocate from Asheville, North Carolina to Shippensburg, by
September 2012.
It makes sense, when possible, to manufacture products
close to where the customers are. Producing Volvo wheel
loaders, articulated haulers and excavators in Shippensburg
will result in shorter lead times for customers. Volvo CE will
work closely with local suppliers to increase the North
American content of the products, which will reduce the
exposure to exchange rate fluctuations.
A new Customer and Demonstration Center will be
built in Shippensburg. In addition, Volvo CE will put up a
new office building on the campus to house its Regional
Sales Headquarters and its Training Center.
Average truck age, years
1980
6.3
7.3 7.3
6.8
6.5
7.2
8.2
1985 1990 1995 2000 2005 2011
A GLOBAL GROUP 2011
1818