Speech of Andreas Renschler, Member of the Executive Board of Volkswagen AG responsible for Commercial Vehicles and CEO of Volkswagen Truck & Bus GmbH
Volkswagen Truck and Bus Start-Up Night IAA NFZ 2016 “Get connected – Driving transportation to the next level”
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Hanover, September 20, 2016
Good evening Ladies and Gentlemen,
A very warm welcome also from me to all of you here in Hanover. I am very happy to see that so many of you accepted our invitation to our Start-Up Night. For our brands, for our teams and for me personally this is a very exciting evening.
Tonight – as CEO of Volkswagen Truck & Bus – it is a great honor for me to introduce you to the world of our new company – to our people, to our vans, to trucks, to our buses and to our intelligent services. I am looking forward to sharing with you how we will drive transportation to the next level.
Being ever faster on the move is a normal condition today – for us, but also for the goods our customers are moving. And due to online business, digitalization and globalization, there is no slowing down in sight. Quite the contrary: Around the world transport streams keep growing.
And so do transport industry and competition. At the same time, one basic rule in our business is more relevant than ever: Truck business is and will always be a cyclical one.
The economic development of markets greatly varies from region to region. Political conflicts and economic instability are significant factors in this and they will remain unpredictable. At the moment all major markets in Europe still show strong demand. Sales in Central and Eastern Europe – except Russia – clearly increased in the first half of 2016. North America shows a different picture: Demand is slowing down and fleets are not being replaced at the same rate as in previous years. Also Latin America, especially Brazil, has to face tough times. But we see the huge potential in this region. Brazil is definitely not out of the woods yet, but encouraging signals are coming up these days. Looking at Asia: For China, the times of two-digit growth rates seem to be over. But even at a ‘New Normal’ growth pace, China represents vast possibilities because economic growth always needs efficient transport.
It is true: In 2016, the Volkswagen Truck & Bus brands and their strong regional businesses have clearly profited from great markets here in Europe. And we are convinced that stable demand for new transport equipment together with our very competitive new products will support our regional leadership in the months to come.
But it is also true that there is no way around a solid global footprint to deal with strong business cycles. The major transport and truck markets are seldom in sync. So what we need to do is to balance the impact of regional ups and downs.
That is why we keep our focus firmly on the future and a fast forward long-term strategy. And that is why we just announced our strategic alliance with Navistar. This close cooperation opens up a new level of scale for synergies and we will see positive effects from that on the technology and supply side.
As much as our industry has to deal with economic cycles, it is true that fast growth in transport puts system inefficiencies on top of society’s agenda. All participants of this system demand better transport: customers, customers’ customers, society and our environment as a whole.
So let’s look at a field that is of high strategic importance and that opens up great opportunities beyond the borders of our core business as a truck manufacturer. By better transport I understand a system that is highly efficient along the entire value chain for the benefit of all – and that is sustainable in every respect. In order to create such a system, all stakeholders need to do nothing less than re-think the world of transport – and to go beyond their own businesses. We all need to cross borders!
In doing so, it is essential to be open to new partners and new ideas. Because hardware alone won’t do the trick anymore. Further optimization of our products and our customers’ traditional way to do their business is reaching its limits. Software and smart transport solutions will become crucial for future success and new additional growth opportunities of all partners. Our key to open the doors to this future are digitalization and big data. These are already transforming the transport industry fundamentally and at an all-time high speed.
This process is not about evolution. Rather, in an industry that is over one hundred years old, we should be ready for a revolution. The Volkswagen Truck & Bus team is ready and eager to drive this revolution in the front seat. Founded in 2015, we are a very young company, indeed. Today, after such a short period of operative business as a group, we have already come very far. 2015 was the year of setting up. 2016 is the year of taking action. Together we will take every effort to shape the future of transport with and for our customers.
And when I say together I mean this in the most literal sense of the word: Together, the teams of Scania, MAN and Volkswagen have set the basis for a successful cooperation among our strong and unique brands. Together, we have defined our common goal: to have created the Global Champion of the industry by the next decade. And together, we are one strong group with one major mission: to drive transportation to the next level.
Becoming Global Champion for us means to be the best in terms of profitability, customer innovation and global presence. Size – for us – is a means to an end. Not a goal in itself. We have not only defined our goal, we are already in the process of implementing it:
- by improving the performance of our group,
- by fostering the cooperation amongst our brands to unlock synergy potential,
- and by strengthening our leadership in markets where we are present and by expanding globally – this includes new business models, too.
For us at Volkswagen Truck & Bus, helping our customers and customers’ customers to be competitive and successful in their business is our everyday drive and attitude. It is the guiding theme in everything we do. With full line portfolio from vans to trucks and buses with drive technology, outstanding services and intelligent digital solutions, we have what it takes to achieve our goal.
Our business and soccer have a lot in common: On both ‘fields’ the best tactic is no good without the right team to put it into practice. I am happy and proud to have an extraordinary management team at my side. A team that is dedicated to going the extra mile. It is a great pleasure to be able to introduce them to you now. This team is not only dedicated to our common goals and collaboration. This team is passionate with everything they do – most importantly, serving our customers’ needs. We work together with two simple, but effective principles: trust and responsibility. And believe me: It works!
We share one strategy. And we share one mission: We all believe that better transport makes a better world. Because of that, we are convinced it is the duty of our industry to re-design transport. And what I know, what we know is that Volkswagen Truck & Bus will play a leading role in this!
For us at Volkswagen Truck & Bus, re-designing transport also means thinking beyond today’s products and technologies. One thing is very clear. There won’t be only one technology that fits all. These times are over! My personal belief is that diesel in commercial vehicles will still be the dominant technology in transport for the years to come.
But at the same time hybrid and electric drive technology will dramatically gain importance as it delivers great benefits especially in urban transport – at least as long as the electric power comes from the right source. I am adamant that we will have city buses run completely on electric drives first. And I think there is no dispute that vans and even heavy duty distribution trucks will follow. The MAN eTruck presented here is developed for inner-city night-time distribution duties. Based on a TGS semitrailer tractor, its completely electric drivetrain allows silent and emission-free transport.
Our brands at Volkswagen Truck & Bus develop alternative drive technologies with great energy and passion. And the results are far from science fiction. Here on stage and behind me on the screen we can see real products that are already on the market, such as the Scania hybrid truck, or that are on track for market launch. So when will you see the eTruck, the eBus and the eVan on the streets? This is what my colleagues will tell you tomorrow at their press conferences. But one thing is certain: We don’t make products only for shows, pretty soon we will be seeing them on our roads.
I hope you agree that talking about strategies is fascinating. And you saw that our strategies lead to real products. So let’s now talk about our stars of this year’s IAA. And I can assure you our main drivers are our products. They are probably are no longer our only core business. But they will remain the core of our business.
These are the stars of the 2016 show. A real firework of new products from our brands. And one of them is a real world premiere here tonight:
The MAN TGE is the all-new light commercial vehicle generation that makes MAN a full range provider now offering vehicles from 3 up to 250 tons. The TGE comes with two wheelbases, three roof heights, three vehicle lengths and offers plenty of space and a high load capacity. The choice of powertrain configurations is extensive. Depending on the customer’s needs, front-wheel drives, rear-wheel drives and all-wheel drives can be coupled with either a manual gear box or an 8-gear automatic transmission. The TGE’s four engine types cover a range from 102 HP to 177 HP. Also extensive is the list of assist systems: emergency brake assist, backing-up assist, cruise control and multi-collision brake – just to name a few – significantly increase safety and driving comfort.
This new van is tailor-made to meet the needs of our commercial MAN customers. And it is the best proof that MAN is back on track. With highly reliable and striking new products and services for the customer, something which this brand has stood for for decades.
Our next star for the IAA: the Scania S730. This is more than a new truck. It is the figurehead of the new Scania truck generation. Finding a new optimum solution for the customer: fuel economy, reliability and safety – these were the key drivers for Scania within the development process of this new truck generation.
The new Scania truck generation provides innovation and applications in technology, safety and services tailored for a wide range of customers:
- Thanks to the great innovation in powertrain and aerodynamics, the new truck enables fuel savings of up to five percent.
- In terms of safety, Scania again sets new standards with the unique rollover side curtain airbags.
Scania took it very seriously. This is the new truck the Scania customers have been waiting for! In the best tradition of 125 years of Scania history, this truck generation paves the way for the future.
Volkswagen Nutzfahrzeuge is our leader for vans and light commercial vehicles. The new Crafter is the new benchmark – in products and in production. Developed to set a new standard in the segment, this van offers perfect solutions for every customer group. Customers can chose from a second-to-none modular set of base models, dimensions and powertrain configurations. In this van, new engines, new axles and transmissions meet new smart software solutions. Equipped with ‘connected van’, ‘CarNet’ and ‘App connect’, the new Crafter is one of the best connected vehicles in the industry. The Crafter is able and prepared to handle existing and future telematics and fleet management systems. Moreover, the customer is sure to like the innovative design.
But what is at least as innovative as the product itself is this van#s development approach: simple but smart! "Our customer knows best what he needs and wants." Therefore we developed this vehicle not only for our customers, but with our customers. We put more customer feedback in the creation of this new vehicle than ever before. The new Crafter completes the successful fleet renewal of Volkswagen Nutzfahrzeuge. We have set demanding goals for ourselves in the light duty segment. I am more than convinced that the Crafter has everything to reach these goals and be a leader in the market.
Qualities and strengths of a product become even clearer when the going gets tough. Volkswagen Caminhões e Ônibus have proven their strengths more than once. During the last few years, our specialist for emerging markets unwillingly had to gain special expertise in crisis management, too. With robustness, high flexibility and outstanding products, our Brazilian colleagues navigate through troubled waters quite successfully. But why do we present the Constellation in our firework of innovations at the IAA? It is true, the Constellation is not a world premiere at all: With more than 180.000 units sold and thirteen years of market leadership in Brazil, the Constellation is more than a truck: it is a success story on wheels. The Constellation 25/420 Prime Series here on stage is a special edition. It has just hit the Brazilian market and as such it is a premiere for Latin America.
With its 420 HP and 1.850 Nm, the truck operates in Latin America in the extra-heavy segment. You can see how different markets and regions require different vehicles. One-size-fits-all does not apply to commercial vehicles. This is why the Constellation line stands for market leadership in Brazil. Its characteristics allow us to introduce and launch the Constellation also outside of Latin America. We believe this truck has the potential to be a market leader in many more emerging markets around the globe.
I could talk about our new vans, trucks and buses at least for the whole evening. And I know you would be the right audience for this. I think I’d better leave that to my colleagues in their press conferences tomorrow. And focus on another topic. Creating better transport takes far more than highly fascinating vehicles or clever strategies. Like I said: Hardware alone won’t do the trick anymore.
Tonight is a very special night for me and for all of us. Some of you will have certainly seen this logo in the media in the last few weeks. And you may have wondered what RIO might be all about: a new navigation app, a new logistics provider or just a new entertainment offer for truck drivers? And who is behind it? Now this is the time for the mystery to be solved: Yes, it’s us – Volkswagen Truck & Bus!
I am proud to be able introduce the latest brand of our portfolio to you tonight: RIO. RIO is our brand for ultimate efficiency and competitiveness in transport; it is an open platform that will change the rules of the game. We are convinced that RIO has the capability and power for the transport and logistics business that Android or iOS have as operating systems in the IT industry. Addressing and eliminating inefficiencies is the order of the day. It has become a daily routine for all players in transport and logistics. When we talk about creating better transport today, we are talking about focusing on a much larger scale. And it goes far beyond efficient hardware. It’s about efficient freight planning, loading processes, traffic flows, up- and downtimes as well as the search for services and – yes, even parking spaces. This sounds complex and it is very complex.
The fact that the players in this industry today use different software systems for their business management makes further improvements difficult, if not almost impossible. Knowing that interaction is crucial to improveíng the processes in transport and logistics, we developed an open digital platform to interconnect all stakeholders, and we named it RIO as the ideal state of transport is that of continuous flow without any disorder, holdup or trouble. And RIO is the Portuguese word for river – symbolizing ‘flow’.
RIO was designed with all competence we have. And from the beginning we were open to good ideas from partners in the industry and beyond. And this will not change. This is why RIO is the very first digital platform that is open for all players in transport and logistics. And RIO is the very first cloud based digital platform that is able to provide an integrated usage of all available data sources and systems within the entire transport system. Offering high-performance cloud based technology, RIO is state of the art in smart fleet and business management.
Intelligent algorithms analyze information and interlink all stakeholders – dispatchers, shipping companies, fleet owners, drivers and recipients – in one system and on one standard basis. RIO gives concrete reliable business management recommendations on the basis of various realtime data.
Every stakeholder using RIO can coordinate his specific business actions with those of his customers and partners in real time. We are convinced that RIO will significantly improve transport and handling processes.
Open to all those working in the logistics business, especially small- and medium sized companies will get access to digitalization – in other words, to the future.
Open to mixed fleets, RIO is a multi-brand solution. Every commercial vehicle with a FMS gateway can be upgraded with the RIO box. And open to third parties, RIO is the ideal platform interlinking services and smart transport solutions. From the start, RIO has been supported by strong partners such as Continental, Schmitz-Cargobull, Krone, Meiller and TomTom, as well as partners for smart solutions and software.
Right from its launch, RIO will also cooperate with start-ups that help make transport more efficient. This is good for our customers as their business will become more competitive and more profitable. It is good for our customers’ customers as transport in general will be smarter and faster. And it is good for the environment as there will be fewer trucks carrying nothing but air on our roads.
The range of possibilities in smart services and business solutions that RIO will offer goes far beyond traditional telematics – and so do the benefits. Starting from spring next year, every new MAN Truck will have RIO on board as standard equipment. Scania customers will then also have the possibility to get connected to RIO. To give you a concrete example how our customers will profit from digitalization: Scania just rolled out flexible maintenance plans that push fleet uptime up to two days per truck and year, which is quite a lot, as you know. So now you can imagine that smart digital solutions will significantly contribute to creating a new highly efficient world of transport.
Opening up the capabilities of digitalization and big data will pave the way for the future of transport. Just like it is indisputable that trucks will always be the core of our business. This is why we chose this MAN TGX for our Connectivity Truck. You can test drive it from tomorrow and you will experience that this TGX is not like the TGX you know. We put a lot of care and attention into our MAN flagship and have overhauled it thoroughly. The new TGX sets new standards in terms of efficiency.
We have considerably enhanced our powertrains. The new engines offer more torque and greater performance with lower consumption. This TGX is equipped with the new 580 HP D38 engine. As all new TGX engines it is more impressive for the customer with 20 HP and 200 Nm and, at the same time, significantly reduced consumption. And we have once again improved the cabin. The reworked front design does not only offer a more distinct and powerful appearance, it also optimizes the cab’s dynamics and increases the cooling efficiency. So it is more than another premiere – it is another star of our MAN portfolio.
Ladies and Gentlemen, I think I gave you a clear idea of who we are and where we are heading to. We think of ourselves as a highly motivated start-up with great heritage, strong brands and products and a dedicated team ready to strive for the pole position. Becoming the Global Champion in our industry is what drives us. Driving transportation to the next level, that is our mission.
And we will succeed in both: by crossing borders, opening our hardware focus and becoming a provider for intelligent transport solutions. By delivering innovative trucks, buses, vans and services with high benefit for our customers, here and now. And by pursuing clear strategies in digitalization and alternative drives.
In 2017, all of our trucks and vans will be fully connected. And our new open digital platform RIO will pave the way to create the ideal state of transport: one of continuous flow.
We at Volkswagen Truck & Bus are ready for the IAA. We all are looking forward to your questions tonight and at our press conferences tomorrow. Thank you!
Volkswagen Truck & Bus GmbH is a wholly-owned subsidiary of Volkswagen AG and is a global leader in commercial vehicles with its MAN, Scania and Volkswagen Caminhões e Ônibus brands. In 2016, the brands of Volkswagen Truck & Bus sold a total of 184,000 vehicles. Its product range includes light-, medium- and heavy-duty trucks as well as vans and buses that are manufactured at 25 sites in 17 countries. As of December 31, 2016, the company employed 77,000 people at all commercial vehicle brands worldwide. The Group is committed to driving transportation to the next level — in terms of products, services and as a partner for its customers.