Volvo 2014 Annual Report Download - page 59

Captive engines for Volvo, %
07
63
08
61
04
42
05
49
06
60
10
75
11
80
12
79
13
86
14
92
09
54
92%
Captive transmissions (AMT), %
08
15
−
10
26
7
11
40
18
12
46
27
13
57
40
14
75
47
09
20
−
I-Shift − Volvo
mDrive − Mack
which is not core for the brand, grew signifi cantly. But in its core
segments, Mack maintained its number one heavy-duty position
in both construction and refuse, and moved from fi fth to second in
the regional haul. The Mack Granite model was, for the second
straight year, the number one selling heavy-duty conventional
straight truck in the U.S.
In March, Mack launched a new brand iden-
tity system designed to better communicate
the brand’s forward-thinking approach to pro-
viding customer solutions, while honoring its
114-year history. A central element is a sleeker, more modern
logo featuring the iconic Mack Bulldog – which has ridden above
the grille on every truck since 1932 – poised confi dently above
the Mack word mark. The new system is part of a comprehensive
effort to ensure that Mack fulfi lls its brand promise as “The Amer-
ican Truck You Can Count On.”
A GLOBAL GROUP 2014 BUSINESS MODEL NORTH AMERICA
Volvo Trucks’ model year 2016 VN series
highway tractors in North America will
deliver even greater fuel savings compared with
previous generation models through an assortment of aerodynamic and
powertrain enhancements. Further sculpting of airfl ow around the exte-
rior and underneath the hood improves fuel effi ciency by up to 3.5%.
Volvo’s new XE-Adaptive Gearing and Torque Management options can
provide fuel effi ciency improvements of more than 2.5%.
Model
year 2016
enhancements for
signifi cant fuel
savings
Captive components: Volvo I-Shift converts North America
In addition to helping our brands deliver the optimized perfor-
mance and fuel effi ciency demanded by customers and regula-
tors, proprietary powertrains represent an important ongoing
source of revenue for the Group and our dealers.
While Mack has always offered proprietary engines, the push for
increased Volvo power penetration is more recent – and has been
remarkably successful. From representing only about a third of
Volvo sales a decade ago, Volvo engines powered more than 92%
of the trucks sold in 2014.
The impact of the Group’s automated manual transmission has
been even more impressive, and it could be argued that in this
area, Volvo innovation has changed an entire market. Automated
manual transmissions were mostly absent from North America in
2007 when Volvo’s I-Shift became the fi rst integrated solution to
enter the market, and many in the industry thought the market
would remain committed to manual gear boxes. But penetration
of the I-Shift has skyrocketed – to the point that last year, it rep-
resented more than 75% of Volvo trucks sold. The Mack brand
has experienced similarly rapid growth with its mDRIVE transmis-
sion, which in 2014 represented nearly 50% of highway vehicle
sales, only four years after its introduction.
Aftermarket leadership
Improved distribution and growth in captive components also con-
tributed to 2014 being the fi fth straight year of record North
American aftermarket sales for the Group; since 2009, the Group
has consistently recorded annual growth of more than 18% in
aftermarket sales per vehicle in operation. Beyond parts, this
growth refl ects increased sales of soft offers like extended war-
ranties, contract maintenance, and leasing.
The Group has also been a leader in connected vehicle and
remote diagnostics solutions. In 2012, Volvo Trucks was the fi rst
brand to introduce an integrated, robust remote diagnostics solution
to North America, and the Mack brand followed in 2013. By the end
of 2014, the systems were on more than 60,000 active vehicles –
and have demonstrated the ability to reduce the average diagnostic
time by up to 70%, and average repair times by more than 20%.
In 2014, the Group opened its new Uptime Center in North Car-
olina. This state-of-the-art facility co-locates personnel from every
customer support function, connects them to customers and deal-
ers with the latest telematics, communications, and case manage-
ment tools, and makes it easy for cross-functional teams to quickly
interact face-to-face when necessary to keep vehicles on the road.
Strong brands
These initiatives have been complemented by ongoing activities
to properly position and build on the brand images of Mack and
Volvo Trucks. These efforts paid off in a 2014 market share
increase to 21.2% (20.1) for the combined U.S. and Canadian
retail market – a market that grew by 17.5%.
Market share growth was driven primarily by the Volvo brand,
which increased its share of the combined U.S. and Canadian
market to 12.4% (11.4), with especially strong growth in Canada
(15.3% vs. 13.1% in 2013). The brand also succeeded in shifting
its sales mix toward small and medium-sized regional fl eets. By
adding an 11-liter XE (“Exceptional Effi ciency”) powertrain pack-
age to the existing 13- and 16-liter versions, the brand drove
2014 sales of this integrated solution to nearly 30% of deliveries.
The Mack brand’s overall share of the combined U.S. and Cana-
dian market was fl at at 8.7% because the long haul segment,
26
7
40
18
46
27
57
40
75
47
I Shift
Vo
lvo
mDr
ive
−
Ma
ck
lvo Trucks’ model year 2016 VN series
tractors in North America will
fl i di
th
l
16
nts for
fuel
55