Volvo Group mulls expansion amid China's green push

Volvo Group is eyeing opportunities arising from China's efforts to embrace environmentally friendly transportation technologies and services, a senior executive of the Swedish manufacturing giant said, as green transformation gains traction in the nation.

Michael Dong, president of Volvo Trucks China, said the proportion of high-end, heavy-duty trucks in China is growing, as both medium to large truck fleets as well as drivers desire reliability, comfort and intelligent technology in trucks.

Chinese companies are shifting their focus from pure upfront costs to a more sustainable, life-cycle costs perspective, making them more willing to embrace highly efficient and environmentally reliable products, Dong said, adding that this offers good opportunities for Volvo.

According to data from the China Association of Automobile Manufacturers, sales of heavy-duty trucks in China reached 787,900 units from January to October this year, a year-on-year surge of some 38 percent.

The continued recovery in China's economy, consumption and government infrastructure construction will help spur a rebound of the heavy-duty trucks market, Dong said.

The Gothenburg-based company has been striving to tap into China's booming e-commerce sector, which is driving the entire transport system forward and resulting in high demand for punctuality and reliability.

Volvo Trucks mainly focuses on the logistics industry in China, targeting the demand for super longdistance transportation.

Each Volvo truck travels at least 200,000 kilometers per year, with a maximum distance of over 400,000 km, and 80 percent of the time is spent on the road every day, Dong added.

Volvo is also scrambling to promote electric trucks.

An electric truck from the company's stable recently traveled 1,185 km over 48 hours from Brisbane to Canberra in Australia, according to the company.

Volvo has yet to bring electric trucks to the Chinese market. "For the logistics field, after installing high-capacity batteries on trucks, the corresponding cargo-loading capacity will be reduced, leading to low economic efficiency. Currently, due to battery technology and cost constraints, the application scenarios of electric trucks are still limited and need to be expanded," Dong said.

Upgrading battery technology or using hydrogen fuel will help bring about more opportunities for the electrification of super long-distance transportation, he said.

"In the future, when the technology and the market get ready, Volvo Trucks will introduce electric product series to the Chinese market, such as pure electric and hydrogen fuel cell heavy-duty trucks," Dong added.

Amid the Chinese market's growing enthusiasm for self-driving technologies, Volvo has also tested its autonomous trucks in Beijing, hoping to apply them to local harbors, given that seven of the top 10 busiest ports in the world are located in the country, Volvo said.

Zhang Yu, managing director of Automotive Foresight Co, said the commercial application of autonomous trucks may come faster than passenger vehicles, as trucks often work on prearranged routes.

Apart from trucks, Volvo also attaches high importance to the construction equipment business in China. In 2020, the company made Shanghai its Asia headquarters of its construction equipment business.

Volvo Construction Equipment has completed its full value chain upgrade in China, from research and development centers to procurement, and from production and manufacturing to overall sales, said David Chen, president of Volvo Construction Equipment China.