The Hindu Business Line : Volvo shifts to new platform as truck sales take a dip

The Volvo India Managing Director, Mr Ulf Nordqvist, told Business Line that the company has shifted to a new platform which is used globally. The new platform includes new engines, cabins and chasis.

Several factors lead to poor sales during 2003-04. "For instance, in the first half of 2003 we expected and experienced a dip in the mining segment demand, which, for that period, affected our tipper and construction equipment - even while the overall market may have grown."

He said during the latter half of the fiscal year, strong growth in the sector helped the company to perform well. But in the case of truck sales, the company was unable to increase its sales. "We were in the midst of model platform change and this coupled with an unexpected rise in demand placed us in a stock-out situation," Mr Nordqvist said.

For example, in the category exceeding 25 tonnes, Volvo's sales dropped 35 per cent to 110 units in 2003-04 while in the category exceeding 35.2 tonnes, Volvo sales dropped 22 per cent to 103 units and in the 16.2 tonnes category, Volvo sold just one unit in 2003-04 compared with four in the previous year.

In the total goods carrier category, domestic sales dipped nearly 29 per cent to 214 units. But the company started to cater to the demand in the early part of 2004 leading to an increase of nearly 85 per cent during January-March, 2004. "We expect the current fiscal to reflect a very good growth level," Mr Nordqvist said.

Volvo India shifted to a completely new platform used globally. These include FM (forward control medium cabin) 12 (ltrs) with 460 bhp which is used for heavy duty work, FM12 with 380 bhp which is also used for heavy duty work, FM 9 trailer with 300 bhp and tippers consisting of FM 9 (8x4) and FM9 (6x4) of 300 bhp each. All the new trucks meet the Euro III norms. The company has, however, pegged the price at the previous levels. The older trucks were in the categories of FH (forward control high cabin) 12 (ltrs) and FM7.

Mr Nordqist said the company's turnover grew 27 per cent to Rs 356 crore in 2003. In 2002, we estimated that we should grow by around 10 to 15 per cent during 2003 . We have exceeded that target," he said. He said the company expects to boost exports during 2004. It has already started exporting buses to Bangladesh, and other equipment to Nigeria. He said the dealer network would be increased through private dealers over the year.

Volvo expects to export Euro 23 million worth of auto components from India in 2004 compared with Euro 14 million in 2003. In 2003, Volvo sold 1,700 trucks, 300 buses and 600 units of excavators, articulated haulers and other such equipment.

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