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Jul 27, 2005

Volvo, Mack team up for SA market

© Reuse this Swedish-based Volvo is considering assembling Mack trucks at its new assembly plant in Durban, which is set to open in October, the truck and equipment firm said yesterday.

Volvo, the world's second-largest truck manufacturer, after DaimlerChrysler, announced earlier this year that it was to close its assembly hub in Botswana, which has assembled knocked-down units for the African market since 2000.

US-based Mack was acquired in 2001 by Volvo, which has since tried to find ways to capitalise on the synergies between the two brands, as well as with its 100%-owned Renault Trucks business.

Volvo South Africa MD Danny Abiri said that, after it was announced in September last year that Volvo would represent Mack in South Africa, the two companies have been examining the best way to proceed in the highly-competitive local market.

The model which will be used to synergise the two brands has been derived from operations and structure in Australia, which has a similar market environment and where Mack and Volvo have integrated successfully, Mack US senior vice-President and international-operations head Frank Meehan said.

He said that Mack saw a 34% overall growth in sales during 2004, and that the company expects the North American industry to grow by a further 15% - 20% this year.

Mack senior vice-president for Australia Gary Bone said that Mack Trucks Australia (MTS), which manufactures all right-hand drive vehicles for the company, had identified South Africa as a key market, particularly because of similarities between the industries and requirements in the two countries.

The Mack brand of trucks has been in and out of the South African market for some twenty years, and Abiri said that the first order of business will be to restore the trust that may have been lost by the company's inconsistent presence in the local market.

The company will also look at renewing and shifting its distribution network, he said.

On the question of whether it is wise to launch a new brand into an already competitive domestic market, Meehan said that he was confident that the Mack products would be successful in niche markets, particularly for South Africa's booming construction industry and for customers who were not looking for European-style trucks.

The Mack SA order book is apparently already looking significantly better, particularly in light of last year's six-truck sales-volume.

Abiri said that Volvo SA has two dedicated salespeople for Mack Trucks, but will continue to train its employees to identify and exploit the synergies between the two brands.

He said that he does not expect to encounter significant conflicts of interest, as the two brands target different markets.

Edited by: Liezel Hill
© Reuse this Comment Guidelines (150 word limit)
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