VBG Truck Equipment offers products and services that contribute significant value for customers and users in the form of increased reliability, personal safety and efficiency.
Leading brands and customer value
The division’s two brands for drawbar couplings, VBG and Ringfeder, account for more than 50 per cent of the world market. VBG is the leader in Scandinavia and the UK, while Ringfeder is strong in the rest of Europe and other markets, such as Australia. VBG Truck Equipment also holds a world-leading position in automatic tyre chains through the Onspot brand, with a market share of approximately 65 per cent and well-established sales in North America.
VBG Truck Equipment has a diverse customer base. The largest customer group in drawbar couplings is body builders, who customise the truck body after it leaves the truck manufacturer’s assembly plant. Other important customer groups include large international truck manufacturers and players in the aftermarket. The main customer groups in automatic tyre chains are users of emergency and commercial vehicles in Europe and the USA. In the USA, the school bus segment is also important.
The market for automatic drawbar couplings has a turnover of approximately SEK 1,000 million per annum. It is impacted by the need for heavy transports in society. Europe’s truck fleet has never been as old as it is now, and there is a substantial need to replace the fleet in both Western and Eastern Europe in the years to come.
Interview with Anders Erkén
"I see great potential in both China and Brazil."
Division Manager at VBG Truck Equipment
VBG Truck Equipment continued to grow in 2018, but with lower margins. How would you comment on this?
Once again, we have delivered a record year while making major and important efforts in both product development and marketing. The margins could have been a bit higher if we hadn’t made these efforts, but 2018 was a strong year for us and we still reported favorable profitability. Contributing factors included good business conditions and winning market shares during the year. In addition, our expanded product range also had a positive effect on business.
In 2017, you actively entered the Chinese market. What happened there in 2018, and what plans are there going forward?
In the autumn of 2017, we signed an agreement with a Chinese distributor, and in 2018 we intensified our work in China. The strong sales volumes we had during the year means that we are evaluating opportunities for local manufacture in China. Additionally, we will continue our efforts in Brazil, which is a market I also see great potential in going forward and where we want to grow organically.
For automatic tire chains, the goal is to take a greater position outside of Europe and North America, our classic core markets.
How do you view the prevailing trends in your industry?
I would say that the biggest, most important trends right now are those around reduced carbon emissions and digitalization. We are working hard to address both these trends and to secure a good position for ourselves going forward. For example, we are participating in several different research projects, and are pursuing discussions around longer and heavier transport vehicles.
In addition to this, we are making efforts to digitalize marketing and sales to strengthen our relationships with end users; our focus for 2019 will be on expanding these efforts to the Ringfeder brand as well. Digitalization is also a significant part of our product development now, and we are working continually on a more digitalized product offering. This trend has been positive for several years.
How do you view your opportunities going forward?
I think we have good conditions for success going forward as well. We have a well-functioning organization, a good position in the market and clearly defined goals. In addition, we are investing in product development and digital marketing. This will continue in 2019 as well in order to build a stronger VBG Truck Equipment going forward. We are keeping a close eye on trends, and are working continually to become more efficient and more productive while also continuing our efforts to expand internationally.
I also think it’s important to continue our work on expanding the breadth and functionality of our product offering and on further increasing focus on customized systems solutions. This will be a success factor in retaining profitable growth also in the future.