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From a technical and product point of view , this is probably the most exciting market we have in the world .”
Market Saturation and Slowing Economy Create Fierce Competition “ From a global perspective the truck industry in Australia is a small market . The Heavy Duty market is only between 10,000 to 12,000 units . However , the number of brands that we have here is enormous ; 17 different brands . It ’ s a highly competitive market and you need to fight very hard to gain market share . In addition , the market has decreased about five percent from last year , creating extra pressure ,” says Voorhoeve .
Over the past 15 years or so , the Australian economy has largely been driven by the mining industry which has led to a strong appreciation of the Australian dollar . “ To use a Dutch expression , I had the feeling that this was the country where the trees grew into the heavens ,” says Voorhoeve of the market opportunities in Australia , “ but the trees are growing a bit smaller now . From a personal perspective , I see that as an ongoing factor .”
With reduced infrastructure projects in the mining sector , combined with lowering prices of iron ore and coal , Voorhoeve understands the increased pressure put on the economy and expects a significantly tougher economic climate in the upcoming quarters .
What does this mean for Voorhoeve and Volvo Group ? “ The economy in Australia needs to make a switch to focusing on non-mining activities as a key revenue stream . This switch is slowed down by the relative strength of the Australian Dollar and that equates to a slower economy . We need to adapt to this new economic climate for the next 18 months .”
“ If I translate that into the transport industry , we have two big activities . One of these is truck sales , which are investments and closely related to business confidence . The other is service and maintenance , related to the amount of work that our customers have ,” says Voorhoeve . “ Both areas are under pressure . Reduced confidence in the economy leads to a smaller Heavy Duty truck market - which we are currently seeing . The
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