Volvo Trucks -- the best-selling foreign brand in the segment in Korea -- expects to sell up to 2,500 trucks this year and eventually hit an annual domestic sales target of 4,000 units by 2020.

“To be able to (achieve the target), we need to hire almost twice as many technicians as we have today. We and our private service partners need to continue to invest more in service points. Most important for us is to continue to be No. 1 in customer satisfaction in Korea. That’s the only way to grow to 4,000 units,” said Claes Nilsson, president of Volvo Trucks, in an interview with The Investor on Tuesday.

Korea was the fifth-largest overseas market for Volvo Trucks in 2015, with annual sales of about 2,000 units.

Regarding the latest trend of self-driving vehicles, recently a Volvo semitruck, equipped with Uber-affiliate Otto’s autonomous technology, delivered 50,000 Budweiser beer cans on its own, cruising 190 kilometers through the US.

Despite the progress, Nilsson forecast it would take some time for fully driverless trucks to become mainstream. 

“I believe it will take many years before autonomous trucks are allowed on highways without a driver behind the steering wheel,” the CEO said. “It is more because of legislations that do not allow it, not because the technology will not allow it.”

Nilsson also believes driverless trucks will be implemented first in confined areas, such as mine, harbor and construction sites, before rolling on highways. “Now we are doing full-scale tests in mines, and let’s say, in three to five years, I think it can be widely commercialized.”

The Swedish truck-maker in September unveiled footage of its autonomous truck driving through a dark mine located 1.3 kilometers underground.

What is happening in the autonomous field -- like extensive research and development and moves such as Uber’s acquisition of startup Otto -- will one day change the landscape of how trucks are driven, he added.

In the meantime, the advancement in autonomous technology can also greatly benefit truck drivers’ safety. “Even if the driverless trucks won’t be allowed on the road for many years, there is lot of findings in those tests that continue to develop active safety tools to avoid accidents for the driver.”

Active safety, according to Nilsson constitutes “different types of assistance” for helping drivers ward off accidents. The technology, which includes an auto braking system and cameras to warn of lane departure, will enhance professional truck drivers’ safety, not eliminate their jobs.

He explained Korean customers are especially keen on safety features and quality of the truck when making their purchasing decision. “I understand Korean customers are mostly small companies with only one to three trucks maybe, which is different from many other countries. There you have big fleets of 100 or maybe 1,000 trucks,” said Nilsson. 

While the sales strategy for trucks is similar for all customers, he believes when the truck operator is also the owner of the firm, “They are more conscious about the safety and living environment inside the cab.”

Along with safety, Nilsson added, environmental care is a core value of Volvo Trucks. “I think we are comparably quite eco-friendly today,” he said, highlighting its clean diesel-powered trucks that meet Euro 6 emissions standards.

However, he is well aware of the general public’s negative notion on diesel-fueled cars after the outbreak of the Volkswagen scandal. “It’s a concern when the emissions and perceptions on diesel (vehicles) became negative and it is not good for our customers.”

Nevertheless, he adheres to the belief that diesel engines will be the main fuel in trucks for many years.

“Of course we are working to develop alternative drivelines and energies for the future, such as bio gas,” he said

Nilsson said the electric truck market is likely to expand in 10 or 20 years. But first, companies have to get right the equation between cost and weight. “A truck is a machine that delivers profit for customers, which is quite different from cars,” he said.

The battery’s weight limits the amount of cargo that long-haul trucks can deliver, he explained. “Hopefully, the batteries will develop over time so this will become more economically feasible.”


By Ahn Sung-mi (sahn@heraldcorp.com)
THE INVESTOR