New usage-based service contract from Volvo Trucks

FleetWatch has often stated that there are no bad trucks coming into South Africa out of Europe. There is also not a heck of a lot to differentiate them in terms of features. Given this, there have to be other ways to attract customers than merely punting the products, especially with Total Lifetime Costs being such an integral part of the purchase decision.

An example of such innovative ‘beyond the product’ thinking has come from Volvo Trucks which, following the success of a local pilot project, is now introducing to South Africa the Volvo Flexi-Gold Contract – a new usage-based service contract where monthly fees are aligned with actual mileage. This means hauliers have greater flexibility to adapt their operations to market conditions and demand.

The new service contract will have the same coverage as the Volvo Gold Contract but with monthly fees broken down into fixed and variable parts (km-based) tailored to the truck’s actual mileage. 

“Many transport companies have short-term agreements with their clients or operate in unpredictable and fluctuating markets. They express a need for greater flexibility when it comes to service contracts. We now have the technology to make dynamic and connected solutions like this possible,” says Thomas Niemeijer, Business Development Manager, Service Contracts, Volvo Trucks.

The Volvo Flexi-Gold Contract has been made possible by advances in telematics, which enable vehicles to communicate real-time mileage with Volvo Trucks. The contract provides customers with a 40 percent flexibility span, where annual mileage can exceed or go under the agreed mileage by 20 percent. 

Each monthly invoice is based on the actual driving for that month, with no additional invoicing or paperwork for exceeding mileage at the end of the year (within the flexibility span). This makes it suitable for customers working with seasonal changes and fluctuating demand. 

“Quite simply, if you drive less, you pay less and vice versa. The Volvo Flexi-Gold Contract offers the same coverage and uptime as a Volvo Gold Contract, at the same predictable cost, but with much greater flexibility to adapt to changing business needs,” says Niemeijer.

The Volvo Gold Contract is Volvo Trucks’ most comprehensive service contract and encompasses preventive maintenance and connected service planning as well as all truck repairs.

“The rapid development of connected services gives hauliers completely new ways of increasing vehicle uptime and optimising vehicle utilisation. By adding flexibility to the payment model, we add another dimension to our offer,” says Theunis Eloff, Aftermarket Director of Volvo Trucks Southern Africa.

“A pilot project for this new usage-based service contract has already been successfully implemented locally and will now be available for South African customers.”

Interesting is South Africa is the first country outside of a few selected European markets to have this offering introduced. It will gradually be rolled out into other markets. That means the rest of the world is following us. Yeah!

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