Cyclicality of the CV Business Flashcards
Four steps to overcome threats of a cyclic truck industry
- Global presence (to compensate for regional trends)
- Diversified product (to reduce segment dependency)
- Focus on services (for steady and long-term revenues)
- Flexibility (to help reduce internal vulnerability)
Example of when a global presence compensated for a local trend
China compsensated for the decline of NAFTA & Europe in 2009
How high can the yoy change be in a regional market?
up to 50%
What does a diversification of product offering allow?
To shift volumes within regions.
Which market segment is currently size-wise most promising?
The mid-market.
What reduces the dependency on the cyclical new-build business?
Offering comprehensive solutions.
3 Levels of customer solutions
- starting point = optimal vehicles for customer needs
- standard business = financing (loans, leasing) and insurance
- additional business opportunities
Customer solutions:
What are additional business opportunities?
- driver services
- vehicle services
- transport efficiency
- mobility
- innovation
Are additional business opportunities correlated to new-built sales?
No
What are driver services?
driver training, infotainment, safety
What are vehicle services?
uptime management, TCO management, truck & trailer servicing
What are transport efficiency services?
- logistics management, goods management, environmental management
What are mobility services?
Truck rental, driver service, fleet pool
Key innovation business opportunities
Autonomous driving, connected trucks, hub concepts
Flexible products and production:
What can reduce costs during the next downturn?
Optimized cost base and high flexibility.
What can be done in terms of flexible products & production?
Modularization of products to minimize complexity and overhead.
Use of supplier cosortia (companies together) for more flexibility in production.
What can be done in terms of modularization of products to minimize complexity and overhead.
The vision is to have shared blocks. So you want to increase the amount of shared components across products and brands.
- Decrease parts and overall complexity
- Reduce fixed costs e.g. for R&D
What does supplier consortia for more flexible production deliver?
- reduce the degree of vertical integration makes production swings more manageable.
–> A consortium in this context is two or more suppliers coming together to bid during a procurement.
How can we diversify the portfolio even more?
Diversify through new business beyond trucks. e.g. use of CV engines in marine & power and agriculture.
