Volvo 2015 Annual Report Download - page 90

Demand continued to good in North America for
most of the year as a result of the economy
developing well. The European market also
showed good growth while South America’s
largest market, Brazil, declined sharply as a
consequence of the economy slipping into
recession. The Japanese market was stable. The Indian heavy-
duty truck market continued the positive development that started
in 2014. The Chinese market, on the other hand, declined for the
second year in a row.
Varying market conditions
During 2015 registrations in Europe increased by 19% to 270,000
(227,612) heavy-duty trucks as a consequence of increased
freight activity, resulting in good capacity utilization and good cus-
tomer profitability, as well as a need for fleet renewal. The total
market for heavy-duty trucks in Europe is forecasted to a level of
280,000 trucks in 2016, based on the expectation of continued
economic recovery in Europe.
The total North American retail market for heavy-duty trucks
increased by 12% to 301,740 vehicles in 2015 as a result of fleet
renewal and fleet expansion combined with good customer profita-
bility thanks to good freight environment, low fuel prices and low
interest rates. Demand weakened during the fourth quarter with a
correction mainly in the long-haul segment. The heavy-duty truck
market forecast for 2016 is 260,000 vehicles as freight activity
weakened towards the end of the year and the need for fleet
expansion and renewal will be lower in 2016.
In 2015, the Brazilian market declined by 55% to 41,603 vehicles
as a consequence of the contracting economy combined with over-
In addition to helping Volvo and Mack deliver the optimized performance
and fuel efficiency demanded by customers and regulators, proprietary
powertrains represent an important ongoing source of revenue for the Volvo
Group and its dealers. Increased service business has led dealers to invest
in more service bays, which supports customers’ uptime and strengthens
brand perception and loyalty. While Mack has always offered proprietary
engines, the push for increased Volvo power penetration is more recent.
From representing only about a third of Volvo sales a decade ago, Volvo
engines powered 92% of the trucks sold in 2015. 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 first 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 in 2015 itrepresented
85% of Volvo trucks sold. The Mack brand has experienced similarly rapid
growth with its mDRIVE transmission, which in 2015 represented 73% of
highway vehicle sales, only five years after its introduction.
CONTINUED CAPTIVE COMPONENT
GROWTH IN NORTH AMERICA
IMPROVED PROFITABILITY
ON FLAT VOLUMES
During 2015 market conditions varied significantly between different parts of the world.
Volvo Group’s deliveries of trucks increased by 2% compared to 2014.
all low business confidence. The heavy-duty market forecast for
Brazil in 2016 is 35,000 trucks.
The total medium- and heavy-duty truck market in India
increased by 28% to 278,139 vehicles in 2015 and is forecasted to
increase to 315,000 vehicles in 2016 based on good business
confidence and increased economic activity.
The Chinese total market for medium- and heavy-duty trucks
declined by 24% to 751,130 vehicles in 2015 primarily as a conse-
quence of lower demand in the construction segment. The market
is forecasted to be at about 750,000 trucks also in 2016.
In Japan, demand remained healthy. Registrations of medium-
and heavy-duty trucks increased by 1% to 89,644 vehicles in 2015
and the market forecast is 90,000 trucks for 2016.
In general the Volvo Group maintained its strong positions in the
main markets even though the market shares declined somewhat.
In Europe the combined market share for heavy-duty trucks
amounted to 23.8% (24.4) and in North America it amounted to
19.6% (20.1). In Brazil the market share in heavy-duty trucks
GROUP PERFORMANCE BOARD OF DIRECTORS’ REPORT 2015
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The truck operation’s product offer stretches from heavy-duty
trucks for long-haulage and construction work to light-duty trucks
for distribution. The offering also includes maintenance and repair
services, financing and leasing.
Position on world market Volvo Group is the world’s second
largest manufacturer of heavy-duty trucks.
Brands Volvo, UD, Renault Trucks, Mack, Eicher and Dongfeng
Trucks.
Number of regular employees 54,668 (58,067)
Share of Group net sales,
68% (67)
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