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Reductions in Volvo factory - weak demand in Europe


kscarbel2
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Dagens Industri  /  June 5, 2019

The Volvo plant in Tuve reduces production rate after the holiday period. Around 150 temporary and staffing employees getting laid off.

Production will decrease from 30 to just over 16 trucks on the evening shift. The reason is said to be the demand trend in Europe.

"We adapt the production rate to the order intake that exists," says Claes Eliasson, press officer at Volvo, according to Göteborgs-Posten .

In connection with this year's first quarterly report, Volvo reported a clearly lower order intake for trucks than expected. The focus was then directed towards the North American market, but also the European order intake fell, down 17 percent compared with the first quarter last year.

However, the vehicle manufacturer repeated the full-year forecast for the total market for heavy trucks.

"When we look at normal indicators such as the price of used trucks, the utilization rate of connected vehicles, we still see a high level of activity and that is also why we are repeating our market forecast for 2019, which is somewhat lower than in 2018, but still on a good level. Order intake trending around 300,000 now, ”said CEO Martin Lundstedt then to Di.

Earlier this week , RBC highlighted Volvo's heavy exposure to Europe as a reason to wait for purchases in an analysis where the recommendation was set to sector perform. The Canadian major bank was also skeptical of developments in the North American market.

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The Volvo and Mack brands ranks at the bottom in North America, at 5th and 6th respectively, with low production volumes, and now the bottom is falling out in Volvo's Swedish production. UD is a money loser, Volvo never having turned it around but rather made it worse. Volvo Construction remains a question mark after losing its shirt in China and key shareholders would like to sell it. Volvo never mentions the Dongfeng joint venture because it never panned out for them. Renault Trucks is the only shining star but it can't carry the group.

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Volvo sure does some odd moves. Besides ending Mack's heavy haul models and big bore engines, the one I really can't figure out is when they bought Champion Motor Grader.

Then they plastered all over their web sit for years that THEY invented everything Champion pioneered. Then one day they just decided, lets get out of the motor grader business and sell it off to a Chinese company.

Then keep saying they want to be in the heavy construction equipment business. Meanwhile every municipality and township and highways department around here had multiple Champion/Volvo graders that get updated every couple years.

Every logging road you go down has a Champion/Volvo sitting on it.

And yet they say there were no sales, so they got out???

So now every construction company has moved to Deere or Cat where they can get a full line of equipment. 

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So how much time passed between the time Volvo bailed on champion and then dove back in? Just went through construction yesterday and there was brand new leased Volvo equipment in the job including a grader.  Doesn’t make much sense like you said to buy a great selling brand just to bail out then go right back into it. 

The problems we face today exist because the people who work for a living are outnumbered by the people who vote for a living.

The government can only "give" someone what they first take from another.

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5 hours ago, james j neiweem said:

Volvo pull out of NA and sell Mack to Cummins,  Hendrickson, Oskosh, Deere or Cat.  

Wouldn’t that be something! My vote is Oshkosh.

 

Holed up at home today.....forgive me if I’m chatty.....

Writings on the wall.....”We need money”

I got an E-mail from our district Volvo rep two weeks ago. Volvo is dropping free Prosis subscriptions next month. He sent a chart to me that had a graduated ramp of cost relative to how many specific Volvo models we own. By the time you get to a Prosis subscription that can cover 10 or more different Volvo models your hitting $2,000 dollars per year. That’s getting right down to business coming off a free subscription and not including the Tech Tool subscription you also need.

 

4 hours ago, Bullheaded said:

 

So now every construction company has moved to Deere or Cat where they can get a full line of equipment. 

 

Cat is a real darling to their customers, much more so even than JDeere. You buy a piece of Cat equipment and they send a mechanic to inspect it once every three months for two years, a free (purchased) service, free road call. Road tech would hand me the list and say “If you want a quote call us, or “this is how I recommend you fix it”...”any questions before I go”...etc. They provide a low cost software subscription that does everything but break a “lock-up”. Lock out=you dummy, the ash load is 140% and your still driving it, now you need a code to unlock it. The day they delivered our first Cat loader they had an IT guy installing our Electronic Technician before the salesman left the front office. 

Volvo restricts the ability to do any machine calibrations. When it was brought up in debate the Volvo rep said “its for your own good, your calibration settings are being preserved in a main frame. If your machine gets hit by lightning or your modules fail Volvo will have all calibrations that have ever been made and will load them directly back to your machine”. The hole in the story is that we are on the main frame, at our shop, with our TechTool. It opens to Volvo “central system” every log in, we had to install WiFi in our building specifically to run it. In fact it took 5 months to get Prosis installed securely because the Corporation’s firewalls considered it too deep of a working connectivity to an outside entity. 

Complaining aside, all in all, the cost per hour is low with VOE. They have some chronic issues, but so far are relatively cheap fixes.

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5 hours ago, HeavyGunner said:

So how much time passed between the time Volvo bailed on champion and then dove back in? Just went through construction yesterday and there was brand new leased Volvo equipment in the job including a grader.  Doesn’t make much sense like you said to buy a great selling brand just to bail out then go right back into it. 

Not sure if I understand what you mean....but they didn't get back into graders. They bought Champion, kept the name for a bit then changed everything to Volvo,

Then 2 or 3 years ago? they sold all grader rights to SDLH (or some letter combination like that....I don't follow that junk) and they didn't even use any of the modern design.

The grader that I did see that they came our with looked like something from the 70's. Big square engine hood and crappy visibility.

Everyone around here switched to a mix of Cat and Deere graders. But most seem to prefer Deere because Cat is having issues with moldboard flex.

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The grader I saw was new enough that I figured it was new so I was wondering why they would buy champion out, kill it then quit making graders then jump back in but they didn’t. https://www.volvoce.com/global/en/product-archive/motor-graders/volvo/

Edited by HeavyGunner

The problems we face today exist because the people who work for a living are outnumbered by the people who vote for a living.

The government can only "give" someone what they first take from another.

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