by James Seymour

New Volvo Trucks VP sets the tone

Marcus Hörberg, new Vice President of Volvo Group Southern Africa, had his first official press briefing at the Festival of Motoring recently

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Marcus Hörberg, who was recently appointed as the new Vice President of Volvo Group Southern Africa, had his first official press briefing at the Festival of Motoring recently, the only industry supported national automotive show, which took place

Previously Vice President of Volvo Peru and Region North for the past five years, he boasts 20 years of experience in customer finance, business development, strategy and country management for Volvo Group in emerging markets.

Marcus began his speech by pointing out that management and staff has done great work and laid a good foundation to build on, also for their continuous efforts and ambitions to deliver on customer satisfaction. “We have retained our number one overall position in customer satisfaction for a consecutive third quarter which is no small feat but, rather a reflection of all the hard work from our collective staff,” says Hörberg. According to the latest Scott Byers report, Volvo Trucks has regained its number one position in sales, maintained first position in parts and second in service delivery for Quarter 2 of 2018, which means that the company has maintained first position overall.

A testament to being number one in sales is enhanced by the high demand for the FH series, specifically the Volvo FH440 6x4 Truck Tractor. In 2017, it was the single most sold heavy-duty truck in South Africa alone according to Naamsa. Above and beyond the 25-year anniversary of the iconic Volvo FH series, Volvo Trucks is celebrating its 90th year anniversary.

Headquartered in Sweden, Volvo Trucks has been able to deliver on quality regardless of the climatic challenges some countries have. “Ninety years on, you can easily trace the practical design, which also reflects honesty, dependability and simplicity. Each Volvo truck continues to deliver on our heritage promises of quality, safety and environmental care,“ he says. “We sell and service professional heavy-duty vehicles in more than 130 countries, which makes us the only truck brand proven to withstand and deliver across all climates and relevant working conditions all over the world, our goal is clear, to be the worlds most preferred truck brand.”

South Africa is the 20th largest market for Volvo Trucks globally and recently saw an introduction of Active Safety features last year, in the form of a R6.5 million investment into its Durban SKD Manufacturing plant which allowed the facility to install and calibrate The Volvo Active Safety Package features that were previously not available to this market. “A standard Volvo truck is one of the world’s safest truck and when equipped with the Volvo Active Safety package, it is even safer for the driver, and other road users,” says Hörberg. Volvo Trucks’ overall vision regarding safety is to have zero accidents involving a Volvo truck.

In terms of Volvo Truck’s third core value, environmental care, Hörberg says that “yes, it’s true that the transport industry plays a crucial role in the development of our society and its economy. However, it also accounts for a significant portion of the emissions that have adverse effects on our climate and our environment. We are part of this problem and, are determined to be part of the solution”.

The company is making continuous progress in the areas of energy efficiency and alternative fuels, the most recent being the sales and production of the Volvo FL and FE electric trucks that will be the first range of fully electrically powered Volvo trucks that will be available in European markets next year. Not forgetting the Volvo LNG, a Euro 6-compliant heavy-duty trucks running on liquefied natural gas or biogas. These trucks have the same performance, driveability and fuel consumption as Volvo’s diesel-powered models. Volvo Trucks is driving this progress and takes a holistic view that will carry the transport society into a sustainable future.

“The future looks bright, and we are planning for it. I am happy to announce that we will be opening a new Durban Truck Centre in 2019, with an investment of R146 Million in a new state of the art dealership to better service our customers in the region,” he says. Volvo Trucks aims to grow their company’s profits in the demanding Long haul, Heavy Transport and Construction segments, expand the after sales, parts and service market potential and to help build a future business landscape through their electric and autonomous transport solutions. “To achieve our objectives, aim on continuing to deliver on a premium Volvo Trucks customer experience with more up-time and ultimately more productivity for them,” he said.

“At Volvo, we are 100% committed to doing our part to support sustainable development. What’s more, we have a clear, positive vision of the future—and we’re working hard to make it happen. It’s about the legacy that we leave behind. I am a strong believer in that value driven organisations with conviction for social responsibility which ultimately contributes to improving societies in emerging markets,” he concludes.

Future transport solutions

Meanwhile, Volvo Trucks presented a new transport solution consisting of autonomous electric commercial vehicles which contribute to a much more efficient, safer and cleaner transportation solution. This piece of information was made available at the Volvo Group Innovation Seminar which took place in Berlin, Germany in September. The long-term goal of the company is to offer companies that need continuous transport services between fixed hubs a complement to today’s offerings.

Growing world population and increasing urbanisation are leading to significant challenges to solve environmental issues such as congestion, pollution and noise. Rising consumption, the fast growth of e-commerce and the wide-spread shortage of drivers put higher demands on efficient transport solutions.

“The full potential of the transport industry is yet to be seen. Everything suggests that the global need for transportation will continue to significantly increase in the coming decade. If we are to meet this demand in a sustainable and efficient way, we must find innovative solutions. To secure a smoothly functioning goods flow system we also need to exploit existing infrastructure better than currently. The transport system we are developing can be an important complement to today’s solutions and can help meet many of the challenges faced by society, transport companies and transport buyers,” says Claes Nilsson, President of Volvo Trucks.

Volvo Trucks’ future transport solution is intended to be used for regular and repetitive tasks characterised by relatively short distances, large volumes of goods and high delivery precision. Transports between logistic hubs are typical examples, but additional use cases can also be applicable.

“Our system can be seen as an extension of the advanced logistics solutions that many industries already apply today. Since we use autonomous vehicles with no exhaust emissions and low noise, their operation can take place at any time whether day or night. The solution employs existing road infrastructure and load carriers, making it easier to recoup costs thus allowing for integration with existing operations,” explains Mikael Karlsson, Vice President Autonomous Solutions.

The operation is handled by autonomous electric vehicles linked to a cloud service and a transport control centre. The vehicles are equipped with sophisticated systems for autonomous driving. They are designed to locate their current position within centimetres, monitor in detail, analyse what is happening with other road users, and then respond with high accuracy.

The transport control centre continuously monitors the progress of the transport and keeps an accurate watch of each vehicle’s position, the batteries’ charge, load content, service requirements and several other parameters. As with an industrial production process, speed and progress are tailored to avoid unnecessary waiting and to increase delivery precision. In this way, it will be possible to minimise waste in the form of buffer stocks and increase availability. Vehicles that operate on the same route cooperate to create optimal flow.

In the near future, Volvo Trucks’ transport solution will be further developed together with select customers in prioritised applications.

World's key players will remain strong in the future

The global automotive industry has reached an inflection point but South African-born Johan de Nysschen, who has held positions at four premium brands —BMW, Audi, Infiniti, and Cadillac—believes that the world's key players will remain strong in the future, despite the arrival of a host of start-up companies, including Tesla.

De Nysschen, who has been in the automotive business for 30 years and whose most recent position was president of Cadillac and a General Motors executive vice president, was speaking at the recent NAAMSA Automotive Conference that took place at the Festival of Motoring.

His topic was titled "Driving revolutionary change led by consumer mobility shifts and technology-driven trend. A visionary leader's perspective in reshaping traditional automotive industry structures and relationships", which he shortened to "The future of mobility."

De Nysschen, who currently lives in New York, said that efficient mobility solutions were essential as the number of so-called global megacities—those with populations of more than 10 million people living in the metropolitan area—were set to grow from the current 33 to 43 by 2030.

He said this meant that individual mobility in passenger cars was almost a thing of the past for many people living in urban areas, quoting the high costs of taking a car into New York City as the city fathers try and cut congestion and emissions in the city. First, he said, there is a toll fee of R220 to enter the CBD, then you will be lucky to find a parking spot for R4 000 a month, while a parking bay in a Manhattan office block will cost about R13 000 a month!

The experienced motorman said he was very aware of the fact that the Chinese government was assisting its motor industry to develop pure electric vehicles —many of them in the budget segment of the market—as a way to dominate the critical mass of EVs. However, he expects the established brands to take the high road in EV development, with the premium brands leading the way in terms of advanced technology and features in these zero-emission vehicles.

"One thing is that the OEMs are on a fairly level playing field as they develop EV technology and subsequent high-volume production of zero emission EVs," said De Nysschen.

"Manufacturing these EVs will be far simpler than building the current, complex models with internal combustion engines. Electric vehicles are like skateboards with batteries in the floor and electric motors driving one or both sets of wheels. It will then be fairly simple to engineer a variety of body types to fit on the basic 'skateboard' underpinnings," explained De Nysschen.

He went on to explain how consumer behaviour was changing and the way in which increasing connectivity was bringing data into the car which can be used for a multitude of purposes, many of them with major benefits in terms of safety on the road as vehicles 'talk' to each other.

There is also a growing trend among young people not to worry about getting a vehicle driving licence, but rather to use public transport, ride-hailing, or ride-sharing personal transport options. For instance, the licencing authority in Germany is reporting a 28% drop in applications over the past five years.

De Nysschen said that it would be a while before fully autonomous vehicles are generally available, but, in the meantime, motorists are already benefitting from a number of artificial intelligence features that improve safety. He added that fully autonomous cars were wanted by the ride-hailing or car sharing operators as removing the driver saved about 30% in costs.

He concluded his presentation by saying that the current major OEMs could well become contract makers to the ride-hailing and ride-sharing companies, building electric, autonomous vehicles to suit the specific requirements of these rapidly-growing businesses.

Naamsa Chairman bullish

Andrew Kirby, chairman of the National Association of Automobile Manufacturers of South Africa (NAAMSA) and president and CEO of Toyota SA Motors, says he is confident that the local motor industry will overcome its major challenges and that the industry will grow substantially into the future.

He said that the South African motor industry is undergoing its biggest disruption since the introduction of the Motor Industry Development Programme (MIDP) in 1995, when the country exported only 11 000 vehicles and imported 20 000, to the situation today where it is projected that production this year will total 609 000 vehicles and exports 340 000 units.

Kirby added that the market was changing fundamentally, driven by rapid technological developments in vehicles and the growth in digital media applications which were affecting customer behaviour as well as the overall automotive business environment, both wholesale and retail.

"Increasing exports into other African countries is a vital part of growing production volumes," explained Kirby. "Increasing motorisation on the continent through a growing middle class is a key which could lead to the African market expanding from the current 1.2-million new cars and commercial vehicles to 2-million vehicles in 5-10 years. However, a big obstacle to new vehicle sales growth is that many countries in Africa permit the importation of thousands of used vehicles. Fortunately, there are moves to curb this trend in the interests of growing the motor industry in several African countries."

When discussing the infrastructural challenges faced by the local industry, Kirby said that one of the most important was the introduction of cleaner fuels, which will permit the importation of cleaner burning and more fuel-efficient engines. Most African countries still permit fuels to be sold which only meet requirements for Euro 2 or 3, at a time when many countries in Europe already require engines to meet Euro 5 or 6 standards.

Paved roads are another aspect of infrastructure that requires urgent attention when growing the vehicle market in SA, according to Kirby. He explained that only 21% of roads in SA are paved, amounting to 154 000 km with a further 140 000 km of roads in the planning stage but few new roads being built.

He added that ports and the rail network are other infrastructural aspects requiring attention if the SA motor industry is to become globally competitive and producing a million or more vehicles a year.

Kirby was also adamant about the need for making the motor industry far more inclusive through empowerment and training initiatives in both down- and up-stream operations.

"Despite the many challenges we face, there is an air of optimism among all members of the South African motor industry regarding the aspirational vision of the upcoming Automotive Masterplan as the path to the future," concluded the NAAMSA chairman.

Many impressive statistics came out of the presentation by Econometrix's Jeffrey Dinham on the economic and socio-economic impact of the SA automotive industry. For instance, he extrapolated the industry's contribution to GDP as 7.7% with direct and indirect impact (R277-billion) amounting to 7.1% and the extra 0.6% coming from the induced impact of motor industry employees' spend, underlining the importance of the automotive sector to the overall economy.

Dinham added that the motor industry was the third biggest spender in SA after government and construction, while direct and indirect employment was estimated at 468 000 people.

He said that the automotive industry is currently the fifth largest exporting sector in SA with exports valued at R271-billion, which equates to a 16.2% share. The value of built-up vehicles exported amounted to R118-billion in 2017, while catalytic converters continue to make a big contribution to the total automotive exports as they account for 10% of global demand.

The economist also revealed that the automotive industry makes a significant contribution to corporate social investment in South Africa, with the seven OEMs spending 2.4-billion on CSI projects over the past three years.

The importance of growing automotive export markets into Africa and building up the continent's motor industry was reinforced by Mike Whitfield, the vice-chairman of the African Association of Automotive Manufacturers (AAAM) and managing director of Nissan SA, as well as in presentations by experts on the subject by Dr Alec Erwin, and Dr Martyn Davies.

After leaving government, Erwin has taken on a number of other tasks, including being a member of the Nigerian Presidential Investment Advisory Council and a Special Advisor to the United National Industrial Development Organisation. This wide-ranging experience made him very well qualified to talk on the subject of "Africa in 2018—the outlook and impact on the automotive sector."

Davies is another person well-schooled in the needs and potential of Africa for the automotive industry, in his position as a Partner and Managing Director of Emerging Markets and Africa at Deloitte. He is currently working closely with the AAAM and returned recently from another fact-finding visit to Nigeria.

The overall message from the NAAMSA Automotive Conference is that the South African motor industry is on the cusp of another growth spurt at a time when the global automotive environment is undergoing its biggest upheaval in more than 100 years.

James Seymour

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