Remember that scene in the 1990 Dudley Moore film
Crazy People , where the psychiatric-patients-turned-advertising-executives come up with the slogan "Volvo: boxy but good?" Puns aside, it generally isn't for their design that Volvo cars are most appreciated. If anything, Volvo is synonymous with reliability. In this respect, the Swedish group reflects its product, with a solid position in the global automotive market and steady sales in recent years. In 2007, Volvo's sales rose by ten percent from 2006.
High roller
As of mid-2008, Volvo (which means "I roll" in Latin), operates in 185 countries, has production facilities in 19 countries, and employs over 100,000 people. The company is a leading manufacturer of trucks, buses and construction equipment as well as marine equipment (Volvo Penta), aircraft (Volvo Aero), and engines for use in industry. The group spent the 20th century developing from a small local industry into one of the world's largest manufacturers.
Since the companys best known business, automobile making, was sold to US-based automobile maker Ford Motor Company in 1999 for 6.45 billion US dollars, Volvo has turned its full focus onto its remaining units, particularly its trucks division. Volvo Trucks is the second-placed truck manufacturer both in Europe and globally.
On a roll for 80 years
The Volvo Group's origins go back to 1927, when its first car rolled off the production line at the first Volvo factory on the island of Hisingen, in Gothenburg. The global car market boomed as the 20th century got underway and Volvo confirmed its status in the prestige market with its 700 series of cars. Introduced in 1982, the 740 and 760, with aesthetics that updated Volvo's traditionally severe, if solid, box-shaped cars, captured the public imagination.
In 2000, the company proceeded with several large structural shifts. It set up a financial services division with the intention of providing its clients with customer financing and insurance services. In 2001, Volvo then invested some of the proceeds from its pre-millennial divestment of its car division to Ford Motor Company, into its truck manufacturing business. The Swedish group also acquired the US-based Mack Trucks and French firm Renault Trucks in a deal worth 1.6 billion dollars. This move made Volvo the biggest global producer by sales of heavy-duty diesel engines.
Constructing an industry
Aside from its sturdy interest in trucks, Volvo is the second biggest manufacturer of buses worldwide, and a big parts supplier for the construction industry, by way of its production of excavators, on-site trucks and crane trucks. The company also considers itself to have set a benchmark in the naval and industrial fields due to the quality of its engines, ranging from generators to train propulsion systems. When it comes to expansion, in 2007, Volvo set its sights on Japan, acquiring Nissan Motors' truck division Nissan Diesel. This gives it an excellent platform for growth in the Asian region.
Volvo gets its wings
As if its domination of the heavy vehicles world wasn't complete, the group is also a big player in the aeronautics domain. An estimated 80 percent of the aircraft in circulation as of 2008 have Volvo components (combustion chambers, for example) within them. Volvo also designs and builds aircraft for the Swedish Air Force.
Roll over credits
As of mid-2008, Volvo kept "rolling" forward successfully, mostly and possibly predictably towards the east. As part of the company's strategy for its Asian markets, in May 2008, the trucking giant signed an agreement with New Delhi based Eicher Motors Ltd. The deal saw Volvo buy 8.1 percent of Eicher Motors for approximately 1.84 billion kronor (198 million euros) in order to hold a 50 percent stake in a new joint venture, VE Commercial Vehicles. The venture operates all of Eicher Motors' truck and bus operations, Volvo's Indian truck sales business and its service network for trucks and buses. At the time of the deal, Volvo Trucks Asia chairman, Par Ostberg, told Indian business newspaper The Hindu that India was the fourth most important truck market worldwide.
One of the company's primary strategies is to "chase" growth in its main markets, and it counts Asia among these, the other two being Europe and North America. The ambitious manufacturer's focus on beefing up its Asian operations has proved astute, considering it has had to face lowered demands in the North American truck market in 2007 and 2008. The group also had to weather an internal crisis in February 2007, in which trade union United Auto Workers (UAW) called a strike in Volvo's plant in the US state of Virginia that lasted almost two months. According to Volvo, the strike paralyzed production and caused 2007 earnings potential in that quarter to drop by as much as 250 million kronor. A new three year agreement with the workers was, however, reached by mid-March.
Rolling in the green
As part of the company's green concerns, in April 2008 Volvo presented two trucks which operate on fuel-saving hybrid technology. These trucks combine traditional fuel sources with clean electric power. Estimated to use up to 20 percent less fuel, these green gods of the truck world are said to cut carbon dioxide emissions by approximately the same amount. Reducing carbon emissions in its vehicles by 50 percent is one of the company's chief green goals, according to its 2007 Sustainability Report.
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