Volvo Rolls on in China

Wednesday, April 18, 2007 1:12

volvo truck logoWith the logistics marketing expanding on nearly every level, and many firms looking to build their networks, it should be no surprise that Volvo would view the China market as one filled with potential.

volvo chinaAnd so it should come as no surprise that Volvo has announced that they will expand their presence in China, and that expansion will start with a 25 city road tour to drum up sales.

With sales of 1,173 units last year (a 28% increase on 2005), Volvo is still only taking a fraction of the market away from heavy hitters FAW and Dongfeng. Of course, at twice the price of either of their competitors that should be expected.

Through the same announcement, Volvo also announced that they will get into the medium and lower end of the markets with new products that will leverage the brand awareness, but offer a lower cost option. given the vast number of individual truckers, this could play very well for them depending on the pricing/ quality comparison with DF and FAW.

One hurdle though, as we showed in our previous post, was that to be successful in China it would be imperative to have in place the service network to support their buyers. After price, the second consideration for many is quality of service and availability of repair centers as downtime = money lost.

FAW and DF (as shown in this map) have in place vast networks of mechanics and part supply centers that ensure very quick turnaround times on repairs. whereas Volvo still must send parts from their Shanghai station (with mechanic in tow) to the site…. resulting in slower turnaround… and as their sales in the medium and low end penetrate, this will be one of the most critical issues for many.

Both comments and pings are currently closed.

3 Responses to “Volvo Rolls on in China”

  1. China Law Blog says:

    April 18th, 2007 at 8:03 am

    Great post. I had been wondering why more truck manufacturers were not selling into China. Now I know it is because one must be able to sell more than just the truck.

  2. rbrubaker says:

    April 18th, 2007 at 8:23 am

    Dan,

    We met with all three (FAW, DF, and Volvo) and even at half the price, and a third of the quality, the locals are selling at 90%+ of the market.

    As one U.S. carrier said… if China Post can buy FAW… so can we.

  3. Rombuer says:

    January 1st, 2010 at 10:02 am

    Convenience service maintenance point is the key to any automobiles and not just trucks.