Executive Order

Volvo Group Australia President Martin Merrick has been tasked with steering the company through one of the most challenging periods ever faced by local markets.

As industry comes to grips with the fallout from COVID-19, a roadmap, is at the ready at Volvo Group Australia.

It includes launching four new models, future announcements in electro-mobility and big plans for investing additional development resources into the Mack brand.

PM: Euro 6 emissions are not currently mandated in Australia, yet VGA has made some significant sales to major fleets. Is it time the Australian government took more interest in what the industry is doing?
MM: I think there is a clear support for Euro 6 to be mandated and I know the Truck Industry Council and a number of industry associations are working closely with the government. We’ve been importing Euro 6 trucks since 2017 based on customer demand. We now see the demand is increasing and we have now invested circa $25 million to build Volvo Euro 6 vehicles here locally, rather than import them. That sort of investment and technology is not just about Euro 6 emissions but leads to safer and more productive and easier to drive trucks. We are also investing $100 million over the next four years in our Mack product strategy which will also include Euro 6.

PM: When will we start to see the new Volvo models which were revealed in Sweden in March?
MM: We’re launching four new models for Volvo Trucks which has been a significant investment of 10 billion Swedish Kroner (approx. $1.56 billion AUD) and of course the Brisbane Truck Show would have been the perfect stage to showcase those new models. We couldn’t just hope about how many of our dealers and customers will be able to travel across borders so we had to make a tough decision early not to participate and a lot of people perhaps felt we were premature in what we decided and I understand that. We just felt that hoping for the best was not a good strategy.

PM: Your predecessor Peter Voorhoeve put a lot of effort into aligning the model line-up across the three brands. Is that going to continue under your watch?
MM: Absolutely. Thanks to the work that has been done under Peter’s leadership and the fantastic team here, we’ve got three fantastic brands that compete in different segments. We have the Volvo Group CAST system (Common And Shared Technology) and we have local engineers. Everything has to be a business case and having a Mack medium duty truck, for example, wouldn’t really stack up for us. Having this local value chain here in Australia we can be sure we have the right line up and we can manufacture the trucks here that are fit for the Australian environment. Currently with the global teams and in Australia, we see increased discussions around electro-mobility, automation, connectivity, and hydrogen fuel cells so that with future technologies we’ve already set out a roadmap.

PM: Is Volvo, as a group, looking at choosing between platooning and autonomous vehicles for continued development?
MM: When it comes to R&D we’ve got to have alternative solutions and we don’t place our bets on just one, but I would say that currently we are going much more towards autonomous. Actually, in Australia platooning has been here for many years in the form of B-doubles and roadtrains. It’s mechanical platooning and perhaps this is what Europe should be looking at rather than the platooning technology. Mechanical platooning is successful and works so well in Australia.

PM: Do we have any idea yet on how the UD-Isuzu situation is going to evolve?
MM: We’re still working through this at a global level but from an Australian perspective for the dealers and customers here, there will be no change. We will continue to be the importer of UD Trucks so from a customer and dealer perspective it will be business as usual. This is not just a sale of UD Trucks to Isuzu, it’s a strategic alliance and also a global technology alliance. I can’t comment from a global level what the future alliance and partnership will look like, but what I can say from an Australian level it’s business as usual.

PM: Can we expect changes in local production?
MM: This year marks 50 years of Volvo Trucks in Australia and we have been proudly building trucks since 1972 at Wacol. We’re proud to create jobs, build fantastic trucks and support not just the Australian transport industry but the Australian economy as a whole. Last year, between parts for production, non-automotive purchases and logistics, we spent, circa, $400 million in the local economy. We get many customers who are proud to buy Australian made. We’re investing in the future of our products and from 2018 to 2022 we’ll have invested over $70 million in our factory here. The four new Volvo models (FH16, FH, FM and FMX) will be built here in Wacol. I have to add that we have done this since 1972 without the need of any subsidies from the government whatsoever.

PM: Is an Australian produced Volvo as good as a Swedish produced Volvo?
MM: I have been very fortunate in my career of 32 years with Volvo to have travelled and visited many factories and what we see here at Wacol we don’t see anywhere else in the world. The engineering and the quality of the build are fantastic. And these trucks are out on the road working in extremely arduous conditions and they’re not just fresh to the market — its year after year performance. So I’m going to say, ‘yep’, I believe the locally made Australian produced Volvo’s are the best in the world.

PM: In terms of sales is it important you are able to finish 2020 at number one?
MM: For us to be number one in market share is very important. Of course, it’s a big thing but perhaps for me the most important number one is customer satisfaction. If we look at Volvo, Mack and UD together we are at 31 per cent market share. Our dealer network and our customers have been great so every three in ten new trucks that have been registered this year are from the Volvo Group. To have the number one Heavy Duty position for the Volvo brand here that would be fantastic and we respect what the competition has done over many years. Yet, I would prefer to have the number one in customer satisfaction than number one in market share.

Martin Merrick at Followmont Transport’s Celebrating Women in Transport event.

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