We are living in exciting times, where technology we have available already today brings major opportunities for us and our customers. Social and environmental challenges, political instability and changed behaviors due to digital and technological transformation are however increasing the uncertainty around us. The Volvo Group is committed to take an active part in defining the transport solutions meeting future demands.
Continued successful development of combustion engines, transmissions and aerodynamics, to name a few, will be important also tomorrow. By focusing on common components between our brands and business areas as well as common product architecture and shared technology (CAST) we will free up capacity and resources for new technologies while mastering the existing.
Innovation does not come out of machines or computers. It comes out of people. Increased need for transports, climate challenges and to lift countries out of poverty set demands on technological innovations and on new ways of doing business.
Trucks, construction equipment, buses and industrial and marine engines make our societies function. When customers use products and services to build societies and facilitate trade, they contribute to prosperity.
Still, there are a lot of opportunities to improve efficiency in the logistical value chain by moving goods and people in a safer, more affordable and timely manner with less impact on the environment.
Facts show that there is great improvement potential in the transport industry related to the utilization of trucks, energy efficiency, as well as safety and congestion aspects. Today’s trucks are not used to their full capacity due to congestion, resting time, service and low fill rates. A truck operating on diesel is one of the most energyefficient ways of transporting goods on our roads. There is no doubt, however, that alternative fuels will play a more important part going forward, as a response to regulations as well as our customers’ and their customers’ demands.
When it comes to safety aspects, it’s a fact that people die in traffic and human error is by far the main reason. It is also a fact that people and goods spend too much time in congestion. Our daily life pattern and non optimized infrastructure and logistics models result both in temporary congestions and at other times heavily unutilized road networks.
In general, today’s trucks are used for a fraction of the day and only to part of their capacity. This is due to congestion, regulations for resting time, service and low fill rates. As demand for transportation is growing, the Volvo Group works to improve utilization rates and thereby delivering benefits to customers, society and the environment.
By understanding our customers’ priorities and challenges, the Volvo Group is able to provide products and services that grow customers’ revenues and decrease customers’ cost. On average about 30% of the total cost of a truck in use relates to fuel. The focus on improved fuel efficiency in our vehicles and machines is directly translated into increased profitability for our customers.
Improved fuel efficiency is one way to lower emissions. Other ways are lower carbon alternatives and new business models that use resources more efficiently. Environmental concerns drive interest for and opportunities in electromobility, as well as for alternative and renewable fuels.
Every year there are more than 1.2 million fatalities and 50 million people injured in traffic accidents globally. Safety is about reducing the risk of accidents and mitigating the consequences of any incidents that occur. It is therefore an integral part when developing our products.
Driver and operator environment
Improving the working conditions and overall experience for the driver or operator, results in more relaxed, safer and healthier driving. Over the years, the Volvo Group has developed a number of features to support the driver’s comfort and driving experience and this work will continue.
Group technology platform
There are three main technology trends impacting our industry: connectivity, automation and electromobility. To a large extent, these technologies are enabled by software technology. The Volvo Group has an excellent platform for the future as evidenced by 700,000 connected Volvo Group vehicles, pilot projects in automated solutions for trucks and machines, as well as our electric and hybrid solutions. The increased focus on the development of software opens up for new opportunities. One example is meeting customers’ demands and delivering productivity as a service instead of selling hardware.
Meeting the challenges
It is a fast moving world. To keep up we need to adjust our ways of working. The Volvo Group is adapting to the new environment by a changed organizational structure, larger involvement of the endcustomer, smaller and less complex development projects and closer partner collaboration. Our electromobility, automation and connectivity platforms will be the foundation on which to further improve customer success by leveraging on the new technologies.
There are, however, many challenges ahead. Some of them relate to affordability of batteries, safety and cyber security. Others relate to business model acceptance from customers, drivers, society and regulators.
The greatest contribution to society is when the three technologies converge. For the Volvo Group the work with these technologies is an investment in our customers’ ability to contribute to prosperity even further.