New Year Message from the President & Managing Director
2026-01-01
Dear Friends & Colleagues at Volvo Group in India,
As we ring in the new year 2026, I wish to start by thanking each one of you, and your families, for your extremely valuable contributions over the last year. In fact, as a result of your commendable efforts, we can look back at 2025 with a sense of fulfilment and pride in our achievements, especially in the context of the unpredictable prevailing environment.
Let us take a short pause to reflect back, as well as look ahead with renewed optimism.
The Global Scenario - Navigating Uncertainty with Confidence
Despite the headwinds, the global economy largely showed moderately positive trends. The US lowered the federal funds’ rate in December, signaling cautious optimism. The Eurozone’s GDP grew modestly, while China saw inflation rise. Agencies raised their 2025 global GDP growth forecast, citing US-led AI investments and lower-than-expected US tariffs. The global growth is projected to hold steady at 3.2% in 2026.
Meanwhile, India continued to be the fastest growing large economy for the fifth year in row, with the first half of the FY 2025-26 recording a robust 8.0% growth, much higher than the earlier estimates. India’s inflation also now hovers around the lower RBI band of 2.0%, enabling our central bank to lower the repo (prime lending) rate to 5.25%.
Volvo Group : Resilience and Transformation, with an increasing Indian role play
As our Global CEO, Mr. Martin Lundstedt emphasized, the Volvo Group has maintained earnings resilience and delivered solid results in the first 9 months of CY 2025 – despite uncertainties & geo-political stress across several regions. Clearly, the Group has not only weathered these storms, but has emerged stronger.
Meanwhile, allow me to repeat Martin’s call to remain focused on five “must wins” that will define our continuing success :
- Strengthening positions in key markets, with focus on North America
- Growing service revenues by over 80%
- Leading the industry transformation through zero-emission vehicles (ZEV)
- Driving product leadership and synergies across the Group
- Creating value through portfolio management and consistent performance
At Volvo Group in India, where we already play an important role through the GCCs in the Group’s global business – we will now have an increasing role in enabling the above clarion call, through the soon-to-be-shared and to be deployed ‘Volvo Group India Integrated Strategy 2035+’. Clearly, this will set out new ambitions for colleagues and teams addressing strategic opportunities in the realm of (a) India for India, (b) India for the World, and (c) Volvo for India.
As alluded to earlier, the India economic story continues to unfold with positivism, with sustained high GDP growth, low inflation, high domestic consumption on the back of growing middle-income group, next generation structural reforms, higher capex spends on infrastructure & energy transition, and availability of digitally savvy young talent. We continued to perform well and ride the positive India story. But, most importantly, the year that just gone by saw Volvo Group make a very significant, long-term commitment and investment towards making GTO Bangalore the 4th Industrial Hub (I4H) for the Group. This, coupled with the following associated strategic steps, promises to make India an important part of the Group’s global value chain :-
- Significant increase in regional & global sourcing ambitions
- Expansion of our truck industrial footprint
- Greater engagement & collaboration across various flows — in Technology, Purchasing, Manufacturing (following the TTI structure) with Sales & Marketing.
Further, the government’s continued push for potential trade agreements with many more blocs, including the soon-to-be announced FTA with the EU, and potentially with the US, post the recently concluded Agreements with the UK and New Zealand, are set to boost the confidence and capital inflows, especially benefiting labor-intensive sectors.
Commenting a few words on the work-in-progress, India Integrated Strategy 2035+ (being chaired by Ms. Sofia Frandberg, Chairperson of our India Board), the ambition is to see Volvo Group play a much bigger role in India, the region and globally, with 3 pronged strategy:
(a) India for India: Seize emerging growth opportunities in India and achieve exponential growth.
(b) India for the world: Leverage our India presence, knowledge, reach, cost base and talent to win in other markets.
(c) Volvo Group for India: To build on the position as thought leader and create additional value across the logistics and infrastructure ecosystem in India.
Even as we look at the mid to long-term, colleagues across functions and businesses have been busy expanding capabilities to create greater value in the country and the Group:-
- Last year, we had announced our entry with Volvo LNG and Road Train Trucks. It’s great to take note that our Volvo FM Duo Trailer trucks are now approved for commercial sales and we have orders for 100 trucks with Road Train specification. We now also have 60 LNG trucks operating in e-commerce and mineral transport and more orders are expected very soon.
- In Construction Equipment (CE), the India-centric 20-ton excavator & compaction segment is witnessing rise in market share and margin, while we have grown our parts & service business, as also doubling our EaaS business over last year. Volvo CE also launched their Bangalore Technology Centre (BTC), taking on both local and global responsibilities.
- At Group Trucks technology, we have put in strong focus on building leaders and a drive towards a high performing and continuous learning organization. The team has successfully delivered many global projects including the Mack Pioneer, Anthem and Volvo VNR intros besides the Onyx (concept truck) reveal.
- The Team GTX is working together to meet our I4H related global and regional sourcing targets at high pace.
- The Group Truck Purchasing team has achieved record sourcing business growth and continues to play a key role in the regional sourcing of AMT and I4H components with good cost benefits. Once again, the team achieved the launch of a new set of fossil-free products and continued focus on de-carbonization towards our global Net Zero targets. The year 2025 saw big steps in GTP’s digital journey with the pilot on Hyper automation
- Digital & IT continues to play key role in enabling Group’s digital transformation strategy. We enhanced cyber resilience with a 24/7 Cybersecurity Operations Center and improved IT infrastructure via the Hoskote Data Center. The delivery maturity advanced through the Digital Factory adoption and a new enterprise architecture tool. Key projects included a record-scale Elvira program, ERP modernization, and secure access for 10,000+ users.
- VGCS Bangalore enabled key delivery services, expanded delivery capabilities and technology transformations.
- The FCA team played a key role in setting up new entities in Mexico and Australia–New Zealand VCE, and successfully brought 18 entities live on Elvira and APIA in 2025.
- Employee Engagement has been a key focus across FCA, VGCS and Digital & IT, and for that matter across all functions and businesses. The teams are making steady progress in improving gender diversity while building a continuous learning organization and upskilling team capabilities.
- 2025 has been a record year for Volvo Penta India in terms of volumes, revenue and profitability. Volvo Penta continues to foray into Global Customers, thereby growing its customer footprint in India and paving way for growth. In addition to Internal Combustion engines, Volvo Penta India team continues to work with customers to bring alternate/ sustainable fuels/ technology for India market
- VFS India (Great Place to Work Certified) continues to move ahead steadfastly, supporting our business areas as also HD Eicher trucks, while employing strategies to accelerate sustainable future growth
- A special word of gratitude to our Group & Global functions of FCA, Taxation, P&C, Volvo Energy, Logistics, Real Estate, Security, Legal & Compliance, Sustainability, CSR, Public Affairs & Corporate Communications that lent pro-active support and expertise to all businesses & functions – enabling the entire system to come together, to play an exemplary orchestra.
Volvo Group India with Martin in Bengaluru - Feb 2025
At Volvo Group in India, we continue to have strong engagements with the Indian industry, academia, authorities and civil society at large. In addition to the existing platforms, like SITIS, we now have established collaboration with HPCL for the Hydrogen Mission Pilot Project and as part of Lead IT, where we have partnered with Tata Motors for accelerating the Hydrogen Ecosystem in India. We also have commenced an interesting collaboration with Airtel and Ericsson to explore the potential of Extended Reality (XR), Digital Twin technologies and AI in the manufacturing sector. Through our CSR Foundation, we continue to serve the society in the areas of health, skills and education. Our marquee “Wellness on Wheels” health initiative has touched nearly 10,000 community members in remote and rural areas. We are now working on a model school for young boys & girls, near Hoskote.
MoU with Ericsson & Airtel in New Delhi
Friends, with India in global spotlight for several good reasons outlined before, together with our I4H and the upcoming ‘Integrated India Strategy 2035+’, we have much more coming our way this year and beyond. I am sure we shall, together, rise to these new opportunities by taking ownership of delivering world-class quality responsibly to our customers – thereby enhancing our reputation. We shall continue to strengthen the DNA of our culture marked by care, mutual respect, transparency, trust, owners’ mentality, innovation and agility. Clearly, collaboration without boundaries will be the key as we move forward.
At Volvo Group, we pledge to continue to work together to build an environment that you love to work in – with focus on diversity and inclusion. I urge our teams to encourage leadership across all rungs and build an environment where every colleague brings her / his best self to work every day. Because you are our No. 1 asset, and at the heart of everything we do. Your well-being and safety is our priority.
As we look forward expectedly into this year, let us do so with renewed energy, a spirit of togetherness, and a shared vision for the success of our customers. Wishing you and your dear ones a brand-New Year, marked with peace, progress, positivity, and prosperity.
Here’s to 2026!
All the best from Kamal