Volvo Trucks; Penetrating the U.S. Market

1332 Words Sep 19th, 2013 6 Pages
Volvo Trucks; Penetrating the U.S. Market
Competition in the world heavy truck industry increased significantly during the 1990s. Volvo was one the top three heavy truck competitions in the world in 2000. In 1975, Volvo had been attempting to penetrate the U.S.S heavy truck market. Volvo acquired the bankrupt U.S. truck manufacturer White Motor Corporation in May 1981, and the heavy truck division of General Motors in 1988. In spite of these efforts, Volvo had never achieved more than a 12% market share. In 2000, Volvo management was considering what need to be done to make the North American business viable. Truck could be divided in three groups: light, medium and heavy trucks.
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White´s, market share shrunk from 15.9% in 1970 to 8.6% in 1974. In the late 1970s proved to be the last straw, leading to a bankruptcy filing in 1980.
White had modern assembly plants in Utah and Virginia. Cab production, located in Orrville Ohio, was in need of an upgrade. Other offices and parts warehouses were located in Detroit, Cleveland and Chicago. The first strategy decision of the formed Volvo White Truck Corporation was to improve dealer and costumer relations. The president and CEO of Volvo Trucks went to the U.S. immediately after the acquisition and spent a full year leading the integration process. Traditionally the relations between manufacturers and dealers in the U.S. had been quite adversarial, and Volvo sought to establish closer ties.
Volvo decided to maintain the White/Autocar nameplates and made only minor changes in the exterior of the trucks. In 1983 was a subtle way of signaling both the changed ownership and the fact that the quality of White trucks was now up to Volvo standards. Volvo decided to close White´s Utah assembly plant and move all assembly to Virginia, with cab production remaining in Ohio.
By 1987 Volvo White had only managed an overall market share of 8% to 9%, comparable to White´s share just prior to its bankruptcy in 1981, and unexpectedly high demand for trucks in 1987 and 1988 led to problems in meeting orders, especially in 1987 which held down share somewhat. In 1988 Volvo acquire GM´s heavy

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