Committed to staying ahead

Strategy

Our strategy guides what we need to do in order to secure competitiveness. After more than a decade of acquisitions to build the scale needed to be competitive in commercial vehicles, the Volvo Group is now in a phase focused on organic growth, improved efficiency, increased profitability and getting even closer to customers.

From the late 1990’s to 2011 the Volvo Group’s strategy was primarily targeted at growth, not least through acquisitions, while at the same time focusing the business on commercial vehicles.

On the truck side, acquisitions include Renault Trucks, Mack Trucks and Nissan  Diesel (now UD Trucks), the joint venture with Eicher Motors in India (VECV) and the strategic alliance with a 45% ownership in Dongfeng Commercial Vehicles (DFCV) in China. Examples from the Construction Equipment side include the acquisition of Samsung’s excavator business, the 70% ownership in the Chinese wheel loader manufacturer Lingong (SDLG), road equipment from Ingersoll-Rand and the hauler business from Terex.

The acquisitions along with organic growth have enabled the Volvo Group to reach economies of scale in product development, production, purchasing and financial services. The streamlining to commercial vehicles has also involved the divestment of non-core operations such as Volvo Aero, Volvo Rents, real estate and the external IT business.

During 2012 to 2015 the Volvo Group underwent a transformation program aimed at reorganizing the company to take out overlaps, reduce structural costs and increase efficiency and profitability after the period of acquisition-driven growth. Among the activities in the program to reduce the Group’s structural cost levels were substantial reductions of white-collar employees and consultants, a reduction in research and development expenses, optimization of the sales and service channel and the industrial footprint as well as a consolidation and optimization of the spare parts distribution worldwide.

Now the Group has entered the next phase with a focus on organic growth and improved performance.