G

1
Göran NybergPresident, Volvo Trucks North
American Sales Marketing
Global Insights and Industry Updates
2
Volvo Group

• Leading manufacturer of trucks, buses,
  construction equipment and drive systems for
  marine and industrial applications
• Employs about 115,000 (15,000 in North
  America)
• Production facilities in 19 countries, selling in
  more than 190 markets

3
Volvo Group Vision
The Volvo Group's vision is to become the world
leader in sustainable transport solutions by

• creating value for customers in selected segments
• pioneering products and services for the
  transport and infrastructure industries
• driving quality, safety and environmental care
• working with energy, passion and respect for the
  individual

4
Volvo Group Organization
5
Group Sales Worldwide 2012
EUROPE
Sales 37
NORTH AMERICA
ASIA
Sales 23
Sales 23
SOUTH AMERICA
Sales 10
OTHER
Sales 7
Net Sales 45 billion
6
2013 Global Trucks Market
7
Industry Update
8
Environmental Regulations
9
We Are Doing Our Part
We know trucks are part of the problem we accept
responsibility to be part of the solution.
10
Environmental Regulations

• North America has most stringent regulations
  near zero soot and nitrous oxides
• Euro 6 aligns with EPA emissions standards
• Globally, other countries lagging
• Regulations affecting equipment options
• Next step is regulation of GHG
• One less gallon of fuel 22.3 less lbs. CO2 in
  the air

11
GHG Rule Impact on Total Vehicle

• Increase in
• Aerodynamic features
• Low rolling resistance tires
• Programmed idle shutdown
• Speed limiters
• Advanced automated manual transmissions

• Highway Tractor Goals
• Reduce engine emissions 3 by 2014, and another
  3 by 2017
• Reduce total vehicle fuel consumption 20 by 2017

• Vertical Integration

• Telemtics

INFRASTRUCTURE
FUELS
VEHICLES
LOGISTICS
RESEARCH
12
Vertical Integration
13
Benefits of Vertical Integration

• Best way to optimize total vehicle quality,
  performance
• Delivers for customers
• Will allow us to deliver truly connected truck

14
Global Focus on Vertical Integration

• Greater vehicle efficiency
• Globally, focus has been on integrated products
• North America now moving toward global model, but
  geographic size and culture will demand more
  options

15
Vertical Integration

• Volvo power penetration 79
• Volvo I-Shift penetration 46
• Volvo I-Shift now standard across North American
  products

16
Alternative Fuels
17
Alternative Fuels

• The ideal would be
• Plentiful / renewable
• Green
• Low emissions
• Environmentally friendly
• High-energy
• Onboard storage / range
• Fuel economy
• Infrastructure-friendly
• Handling, transport, storage
• Safe

18
Alternative Fuels Natural Gas

• Natural gas gaining market acceptance
• Economics
• Less than diesel
• Domestically available
• Abundant supply
• Reduced environmental impact vs. diesel

19
Predicted Natural Gas Market Development
Applications Time
Refuse, Vocational, Local Distribution
Segments with home base fueling, not dependent on
the general infrastructure
Applications with fixed routes where
infrastructure is secured and range requirements
are less
Vocational, Local Distribution, Regional Haul
Long-distance applications in corridors with
secured infrastructure
Long Haul
20
Considerations

• Is it right for the application?
• Acquisition cost and residual value
• Maintenance infrastructure and requirements
• Safety and training (drivers and technicians)
• Supply and delivery infrastructure
• Standardization of fuel quality
• Design of fueling system
• delivery stations developed for application
• fast-fill (highway)
• slow-fill (refuse)

21
Connected Vehicles
22
A Smart Truck

• Slow down if approaching a stationary object too
  fast
• Remember a road already driven and optimize the
  fuel consumption
• Wake up a drowsy driver
• Self-diagnose issues and notify a dealer of
  service
• Re-route from a congested road
• Talk to other trucks to avoid accidents

23
Connected Vehicles
Ultimately, a truck may never be offline
24
Connected Vehicle Platform

• Connects
• driver to vehicle
• vehicle to OEM
• OEM to decision-maker
• decision-maker to dealer
• dealer to driver
• Integrates information from the vehicle in
  conjunction with Volvos service management tools

25
Freight Efficiency
26
Global Infrastructure

• Increased freight volumes expected as increased
  world trade and demand for mobility put pressure
  on existing system
• Boston Consulting Group estimates that 35 to 45
  trillion USD is needed over the next 20 years to
  satisfy the rising need for infrastructure
  globally

27
U.S. Infrastructure

• Ports are investing to accommodate the
  anticipated growth in volumes over the next
  decade.
• The Heartland Corridor and The Crescent
  Corridor are anticipated to keep East Coast
  railway system relatively uncongested in the
  coming decades.
• About 150,000 miles of road will be rebuilt by
  2016.
• Freight tonnage up 21 by 2023

• 42 of major urban highways are congested
• 226 billion hours sitting in traffic
• Annually, congestion costs trucks moving goods
  27 billion in wasted time/fuel

Sources ASCE 2013 Report Card, 2012 Urban
Mobility Report and U.S. Freight Transportation
Forecast to 2023
28
Panama Canal Expansion

• By 2015, capacity will double and allow for
  passage of larger ships
• Expected to change shipping patterns, increasing
  traffic at East Coast ports
• Shift from longhaul to regional and local truck
  traffic
• Move toward more daycab tractors

29
Customer Priorities
30
Meeting Customers Top Priorities

• Fuel
• Efficiency

Driver Productivity
Safety
Uptime
31
(No Transcript)