Volvo unit will ‘stay with China’ during slump
Print Edition
VOLVO Construction Equipment, the second-largest division of Sweden’s AB Volvo Group, promoted the concept of “how caring drives innovation” at last month’s Bauma China trade fair in Shanghai.
The international exhibition, which focuses on construction machinery and related materials, served as a launch pad for new Volvo Construction products in China, including pavers, a wheeled excavator, a wheel loader and crawler excavators.
One notable highlight was a range of “special for China” attachments for Volvo’s L105 wheel loader, which can turn the machine into a multiple tool carrier useful in underground tunnels and mining sites.
Martin Weissburg, 52, took over as president of Volvo Construction Equipment last January 1. A native of the US state of Ohio, Weissburg holds a bachelor of science degree from Purdue University and an MBA in international business from George Washington University.
He started his professional career in construction equipment with Caterpillar. He was president of the Volvo Group Financial Services prior to his current position.
Weissburg sat down with Shanghai Daily recently to discuss trends in the industry.
Q: How is Volvo Construction Equipment coping with the currently weakness in the Chinese economy?
A: China is in a period of correction, or some downturn, after many years of very strong growth. As with most large and maturing markets, businesses go through cycles, and now China’s construction equipment industry is in the down part of a cycle.
However, it will come back. At Volvo Construction Equipment, we are very committed and determined to stay with the China construction industry throughout good times and bad. We will continue to invest and remain committed to the Chinese marketplace.
Q: How do you perceive the latest interest rate cut by China’s central bank?
A: I don’t think a 0.25 point reduction will have an immediate huge impact, but I think it is the first step in a very good direction. It is not so much the impact of the reduction, but rather the message it is sending, that the government is very serious about having a positive impact on the economy.
Q: How do financial services matter within your company?
A: What is true in China is true in most of the markets around the globe. Customers purchasing construction equipment often are looking for the complete package, which usually includes financial services — either a loan or leasing — and this is true in emerging markets as well as mature markets. Financial services are part of the merchandising of the equipment and more so in construction equipment than even in trucks. So I think these services in China will continue to be a very important part of the formula.
Q: Given the relatively small portion of Chinese managers in Volvo Construction Engineering, what is the company’s view on localization of its management team?
A: Our approach is global strength but local expertise. To be in China, we must be Chinese. As markets develop and there is more available managerial and executive talent, the Volvo Group has a very focused strategy of diversification. The localization of talent is a natural progression.
I think our strategy in any market comes from the bottom up, not from the top down. It is formulated through interaction with customers and dealers, all of whom are, by definition, local. To address any marketplace, you have to be in touch with customer and dealer needs.
Q: The Chinese government has been pushing innovation in machinery and electrical industries. Do you think innovative products are well received in the Chinese market?
A: I think innovative products in our markets take time to be absorbed and well received. They have to prove to customers that they hold value and represent the next rung in technological development. I think in the Chinese market, this will continue to develop over time. An example would be when the next energy-emissions regulations come out. This is an example of technological advancement that is good for all parties as well as society.
Q: Are there any differences between the product innovation process in other countries and that in China?
A: I think the product innovation process differs not so much by country but more by company.
For example, at Volvo CE, being a multinational, we have our technology center based in Jinan here in China. And our Jinan technology center uses the same technological innovation and expansion procedures and process as we do in our technology centers around the globe.
I think it varies not so much by country or even by culture but by company and how serious a company is to drive innovation in each of its markets.
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