Asia remains in sharp focus, commits new president

Speaking at his inaugural press conference as Volvo Construction Equipment’s president and CEO, Pat Olney has outlined the company’s ambitious growth strategy for China and the wider Asian region. He also used the occasion to reassure the market that there will be no radical departure from the existing and highly successful Asian strategy promoted under his predecessor’s leadership team, of which he was a senior figure.

Mr. Olney was speaking in Shanghai on May 17th to Chinese journalists from leading trade and business titles, where he highlighted a package of initiatives destined to expand the company’s operations and increase its customer base in Asia. It was no coincidence that China was chosen as Mr. Olney’s first major speech as president, given the importance of the country and the wider region. The company saw revenues in the region double during 2010, making Asia its largest sales area.

“Volvo is well positioned, both in China and the rest of Asia, to capitalize on the huge market opportunity and growth potential,” commented Mr. Olney. “Our dual brand approach (Volvo and SDLG) offers a unique advantage to meet the needs of a much wider customer base. We will support this approach with products dedicated to this market, using local Chinese knowledge and leveraging an expanded Asian manufacturing and distribution footprint. These products will offer superior safety, quality and environmental care, as well as offering best-in-class fuel efficiency.”

Manufacturing, distribution & product expansion in Asia

Volvo Construction Equipment has maintained a heavy investment commitment in recent years. The company recently announced the introduction of its new Volvo F-Series articulated haulers, G-Series wheel loaders and a China localized EC200B crawler excavator. These come on top of a four model range of China-specific excavators – made and marketed by Volvo’s joint venture partner in China, Lingong, under the SDLG brand.

Soft product and service offerings have also constantly evolved to better meet customer needs. The "Volvo Hose Service" is yet another initiative from Volvo aimed at improving machine availability for customers by allowing faster hose replacements on the machines thereby reducing the machine downtime and cut hose cost by up to 30% of the current level. As part of the Volvo Hose Service initiative all Volvo dealers in China would be equipped by state of the art Volvo approved hose making equipment.

In terms of design and manufacturing, investments in China include the creation of a $30 million Volvo Technology Center in Jinan and an $88 million expansion and investment of the company’s Linyi facilities. This comes on top of the $30 million investments made in the Volvo excavator facility in Shanghai since 2003. These initiatives are joined by an ambitious programme to expand the company’s distribution network in China.

“Volvo is committed to supporting the capacity, distribution and product offering in China and throughout Asia,” concluded Mr. Olney. “We will achieve this by a comprehensive programme of investments in our Asian industrial operations, a strengthening of our dealer network and an expansion of Volvo and SDLG branded products that are more closely tailored to the specific needs of customers in this region.”