Volvo / Mack Least Affected In US By Cat Deal - Plus Volvo Chief Sees No Market Growth In 2008

Implications: In rounding out thoughts regarding the previously noted Caterpillar-Navistar deal, Volvo and their Mack subsidiary are the easiest to summarize. They are not greatly affected in the US, but may be in overseas markets after the joint venture gets going. Also separately, the Volvo chief is confirming what many of us are predicting - flat sales for 2008 v. 2007.

Analysis: Volvo Trucks North America (VTNA) garners about 12% Class 8 market share with their Volvo brand and another 8% with Mack. Those numbers have been pretty consistent over the last several years. Cummins powered about 40% of those in 2005 and dropped to about 27% for 2007. This is the result of a push (and pricing) of Volvo’s engines in their vertical integration pitch. Those engines have delivered pretty good performance. Mack has been and will continue to be vertically integrated with their own power.

For 2010, the Volvo platform will be Selective Catalyst Reduction basically added to their currently offered Volvo-branded 11, 13 and 16 Liter engines. Of course there will be some other minor changes, but their pitch is that it’s the same platform since 1993 - unlike others. Cummins 15 Liter EGR engine is still planned to be offered as an option as with all other major truck brands.

Volvo’s Class 8 market successes have been in the LTL segment and in some major TL fleet deals. While some of their gains have been as an alternative to Freightliner, the Navistar Prostar is expected to blunt some of their future potential market share growth. Volvo / Mack’s vocational successes will continue.

Volvo CEO Leif Johansson also recently told investors what many have been predicting for 2008 sales growth - against what other experts were stating. He predicted sales will be similar to that of 2007. We understand why - freight, fuel & financing! Nuff said…