Volvo Trucks MD brings bus experience to bear on greener trucks

The major truck importers seem to turn over MDs almost as fast as Premier League football clubs and the latest incumbent at Volvo Trucks Robert Grozdanovski recently took over following Arne Knaben’s five year stint.

Grozdanovski comes to Warwick after eight years in Eastern Europe and says that within reason Volvo gives its senior managers a say in where they work.

“Of course you have a choice,” he laughs. “At least, I've had the choice in the past, but at the same time, there are not many places where I could fit in. The language barrier is a challenge and I don't speak French, Italian or Spanish.

“I didn’t speak Czech either but I learned. Since I was part of developing things in Eastern Europe, it made very good sense for someone like me, having started in Sweden and being from Gothenburg, to bring a little bit of the Swedish leadership style and some Volvo DNA down there.”

Grozdanovski’s parents moved to Sweden from the part of the former Yugoslavia that became Macedonia. “I was born and raised in Sweden but I picked up the language and it's a Slav language,” he explains. “That has helped me through the years to learn Eastern European languages.”

Engineering graduate

Starting with Volvo Buses in 1997, Grozdanovski is an engineering graduate and moved to the truck side as a sales engineer.

“Moving to sales engineering, I got closer to sales,” he says. “Then my bosses saw me deal with some potential customers and said ‘maybe you should really move to sales’. Then, back in 2004, when the European Union was extended, we needed to reinforce Volvo’s presence there and I was asked if I wanted to move down to Poland.

“That was my first assignment outside Sweden and I spent almost three and a half years in Poland as commercial truck director. Then I moved to Slovakia to become MD for Volvo Trucks which is when we decided to make a big change in our strategy and took over many of the dealerships. We went very much for direct sales.

“At that point, we decided that we needed to invest and the private dealers were not willing to invest over there. We had to do it ourselves.”

Grozdanovski spent three years in Slovakia before moving to the Czech Republic to implement a similar strategy there.

“I started as MD for Volvo Trucks in the Czech Republic,” he says. “Then came the Renault integration so I got to take on that as well, and became the head of Volvo Group. Later I become the regional head for Volvo Group in the whole of central and South East Europe. It was 15 countries, obviously smaller countries than over here, but interestingly, pretty similar volumes and number of dealer points. That's what I've been doing for the last five years.”

Grozdanovski has however no plans to buy out Volvo’s large and successful private UK dealerships Hartshorne, Crossroads and Thomas Hardie to add to the three dealer points it currently owns.

“I actually think that a mixture is best,” he says. “It's good to be into retail ourselves because our people can learn and get the feeling for what it really means to be close to the customer. Otherwise, we are a little bit protected, sitting in a nice office somewhere.

“At the same time, when you are doing everything on your own, you lose some agility. It's also good to learn from the private networks because there are many great entrepreneurs here doing a good job.

“I would honestly say we will be equally demanding of our dealers, whether it's wholly-owned or private. I have always been of the opinion that a salesman can sell the first and second truck, but not truck three, four and five. It's the workshops that sell them and that's why we need to have world class dealers, whether that's on technology, competence or just taking care of people in a nice way. All that is key in the relationship.”

Despite its proximity to Russia, Eastern Europe is dominated by West European truck brands. “It's 97% Western truck brands,” says Grozdanovski. “In Czech Republic, we have Tatra, which is a local Czech brand. And we saw Ford Trucks coming in from Turkey in the last two years but it's too early to judge how successful they will be.”

Volvo was early into Eastern Europe and has benefited from that faith in those markets.

“We have always been among the top three and in many countries, we are the market leader,” says Grozdanovski. “In Czechoslovakia, Hungary and Bulgaria, Volvo was perceived as an amazing truck compared with many of the local manufacturers at that time. The Volvo was on a different level.”

Bus learnings

With his background in buses, Grozdanovski is well placed to bring Volvo’s long experience in alternative fueled buses into the truck market.

“We had Volvo gas buses I would say 20 or 25 years ago,” he says “Here in UK, we have for the past five years been very successfully delivering lots of hybrid buses. I think it's the biggest hybrid bus population in Europe. They are very good on operating costs simply on fuel savings and we will deliver the first full electric bus in the York area pretty soon.

“They are always ahead of trucks in special applications such as urban transport and we are learning from buses. Buses are the test pilots and what we are now using for our electric FL and FE takes a lot of the learnings from these full electric buses which have been running in cities like Gothenburg for some years already.”

Like all the European OEMs Volvo needs to start delivering a lot more gas and electric trucks if it is to meet the EU targets for a 15% reduction in carbon emissions by 2025 and a 30% cut by 2030 based on 2019/20 levels for trucks over 16 tonnes. As well as selling more low and zero emissions trucks, this reduction will also be made up of cuts in fuel consumption for diesel vehicles.

“It will be a mix,” says Grozdanovski. “I think by 2025, electric will still be a rather small proportion, not more than 10%. We are still improving our diesel range – with I-Save we talk about 7% which is quite a significant saving. Diesel is an old technology but still there are a lot of things to do to optimise it.

Incentives

“Right now, it's very much on the truck manufacturers. The operators need some incentives to be fast adopters of these kinds of technologies. The natural thing to swap to is the LNG and we are delivering FM and FH 6x2 LNG tractor units this year. Many customers are extremely pleased with them because they see big savings. The business case is positive for them and at same time we contribute to reducing CO2 emissions.

“I would think that more than 50% of the tractors would be LNG by 2025.”

This is despite the small-scale production of LNG engines and tanks means that the price premium over a diesel is still 40% to 50%.

“That's a lot of money but with the big difference in fuel price, you have a payback of two years if you do enough mileage every year,” says Grozdanovski. “Many customers are now confirming that after just a couple of months in operation, the fuel saving is there and they are very happy.”

Volvo is unique in developing its HPDI gas engine that uses a small amount of diesel rather than a spark plug to ignite the fuel.

“The spark ignition is simply not a proper engine, and from the beginning Volvo wanted to make something different,” says Grozdanovski. “HPDI is more economical, which contributes to the cost reduction in operation. It costs more but it then delivers more.

“It also does not limit the power because some of the spark plug solutions are a little too weak in certain applications. The maximum horsepower of our 13-litre gas engine now is 460.”

Although Volvo has decided to separate the sales and marketing of Volvo and Renault trucks the two companies are co-operating on the development of low and zero emissions vehicles. “We need the economy of scale there,” says Grozdanovski. “Our group trucks technology team is developing all the engines and some other big key components.

“But for Volvo, it needs to be adapted, finally, so customers have the Volvo feel, the Volvo sound and whatever else you would relate to a Volvo. The group has been pretty good at this and we are getting even better. It's not one-size-fits-all. It has to fit with the identity of the brand and at the same time benefit from our scale in this very expensive development and research.”

I-Shift the best

Volvo’s I-Shift gearbox has long been rated as the best on the market but Grozdanovski is relaxed about the prospects of the technology appearing on Renault trucks.

“In some applications, parts of it are used to good effect and I think it simply brings economy and performance for those Renault customers,” he says. “Again, the group is sharing revolutionary technologies and we even let other competitors use some things that we have invented throughout the years. The seat belt is the biggest thing that we let everyone use. There is a little bit of Volvo in every truck or a car all around the world, which we are very proud of.”

One way to reduce carbon emissions from road transport is to allow larger, heavier vehicles which can carry more freight for each litre of diesel burnt.

“In Czech Republic, we were delivering units for these 25-metre combinations and they were achieving good efficiency for the operators with no issues on the roads,” says Grozdanovski. “The UK has a lot of traffic but at the same time I would say it also has very good wide roads with four or five lanes. It shouldn't be an issue to test it here.

“With our heritage in such combinations, we would be very pleased to try it out. Our company is involved in those tests in Holland and we were involved in Finland when they changed the legislation so now the limit is up to 74 tonnes as standard and in winter time 96 tonnes. We have powerful trucks that can pull these weights.”

Brexit gridlock

Grozdanovski arrived in the UK in the midst of Brexit gridlock, and like everyone in business wants to see an end to the uncertainty one way or another. Volvo Trucks UK did not however increase its vehicle stock ahead of the expected exit date of March 29 to avoid the proposed 10% import tariff on trucks.

“We were just lucky with the prolongation,” he says. “Customers, maybe triggered by our sales people, ordered more and we had a very strong quarter one. A lot of customers have been proactive but no, we have no hidden stock.”

After that strong first three months, which saw UK truck sales up by almost a quarter compared with 2018 and Volvo increasing sales 10% to 1,719 units to give it a 14.5% share according to the SMMT, Grozdanovski expects the UK market over 16 tonnes to end the year on around 35,000 trucks – the same as 2018.

“We predict it to be rather similar to 2018 this year, but the phasing is very different,” he says. “We believe the market will now drop unless some of our competitors have fields full of stock. We believe that we will see an upturn in September or October and then a drop again in November and December. It's a very odd year which should not be taken as a benchmark going forward.”