Volvo Trucks’ Mexico exit raises concerns for carriers

One of the main concerns for the Gaytans was how Volvo’s decision would affect the resale value of their trucks in Mexico.

“I feel sad, baffled and disappointed,” Gaytan Jr. said. “It is difficult to assimilate that if you decide to sell your Volvo Mexico truck, suddenly there is no one to buy it.” 

Volvo officials said the decision to discontinue truck sales south of the border was made because of “changes in the global business landscape.”

“Driven in part by the pandemic, and by the ongoing transformation of the transportation industry, [that] led us to review business, market and product strategies in all our markets,” John Mies, spokesman for Volvo Trucks North America, told FreightWaves.

“In Mexico, a combination of factors, including the lack of local manufacturing, significantly affect the outlook for long-term competitiveness in the market,” Mies said. “You may recall that we recently announced a $400 million investment in our New River Valley assembly plant in Dublin, Virginia, which among other things will prepare the plant to begin manufacturing our fully electric VNR model.”

Volvo manufactures all of its North American trucks in Dublin. As part of the decision to cease sales in Mexico, Volvo also laid off 14 of its 37 employees in the country, Mies said.

Volvo will continue to support existing customers in Mexico with maintenance and distribution through a network of Volvo dealerships, according to Mies.

“We will ensure we have the organization and systems in place to continue support for the rolling fleet in Mexico,” Mies said. “We will honor all warranties and service contracts, and customers in Mexico will have all the aftermarket support they need in order to continue with their operations.”

Although Volvo said it will honor warranties and service agreements, selling aging Volvo trucks will still be a challenge, the Gaytans said.

Gaytan Sr. founded Super Transporte Internacional in Nuevo Laredo, Mexico, in 1988. Today, Super Transporte Internacional and STI operate as two companies. Gaytan Jr. is the general manager of Laredo-based STI.

Both companies often combine and share equipment, offering transportation services in the U.S., Canada and Mexico.

“After the five-year service agreement ends, who’s going to want to buy trucks they no longer are going to manufacture?” Gaytan Jr. asked. “We’re not the only ones that are upset. They are going to have an issue with a lot of carriers along the border.”

In December, STI received 100 new Volvo trucks that it had ordered earlier in the year. In 2019, the company also received 150 Volvo units for its operation in Mexico.

“A lot of companies here in Laredo, like us, have operations on both sides of the border,” Gaytan Jr. said. “There’s a number of carriers that have over 200 trucks, all the way up to 800 trucks. This decision hits them really hard on both sides of the border.”

Gaytan Sr. is also vice president of the northeastern chapter of Mexico’s National Chamber of Freight Transport (CANACAR). CANACAR officials will meet with members of Mexico’s Ministry of Economy Thursday to discuss how to bring Volvo Trucks back to Mexico and what can be done to help Mexican carriers.

Gaytan Sr. said they are going to ask the Ministry of Economy to help file a formal complaint or appeal to Volvo’s decision.

“What can be done if Volvo is never coming back? What will Volvo do as far as buying the trucks back when our contracts are over or when we are ready to sell the trucks?” Gaytan Sr. asked. “We are working on a formal statement to send, CANACAR joined by Mexican government, to try to put pressure back into Volvo and have some sort of discussion, which should have been done before this decision was made.”

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