Volvo for life
Volvo
Tagline
Net Worth
$49,800,000,000
Started in (City)
Gothenburg
Started in (Country)
Sweden
Incorporation Date
14th December, 1927
Bankruptcy Date
-
Founders
- Assar Gabrielsson
- Gustav Larson
About
The Volvo Group (Swedish: Volvo Koncernen; legally Aktiebolaget Volvo, shortened to AB Volvo, stylized as VOLVO) is a Swedish multinational manufacturing company headquartered in Gothenburg. While its core activity is the production, distribution and sale of trucks, buses and construction equipment, Volvo also supplies marine and industrial drive systems and financial services. In 2016, it was the world's second largest manufacturer of heavy-duty trucks. Automobile manufacturer Volvo Cars, also based in Gothenburg, was part of AB Volvo until 1999, when it was sold to the Ford Motor Company. Since 2010 it has been owned by the Chinese multinational automotive company Geely Holding Group. Both AB Volvo and Volvo Cars share the Volvo logo and cooperate in running the Volvo Museum in Sweden.
Beginning
Volvo’s story begins with a trademark that couldn’t make its name for a longer time. Assar Gabrielsson was a salesman in SKF company, a mechanical component manufacturing company. The company was prior in the business of ball bearing and initially decided to use “Volvo” as a trademark which was registered in May 1911 but later the trademark was changed to “SKF”. Assar along with Gustav Larson, Swedish automotive engineer decided to build a car that can survive Sweden roads and the cold environment. On August 10, 1926, Assar and Gustav began the manufacturing of cars as a prototype under the company name, “AB Volvo'' and in 1927 launched its first car, Volvo OV 4. The company’s production was set in Hisingen, Gothenburg. A total of 280 cars were manufactured and after the success and international attention, Volvo prepared and sold 639 units. Volvo OV 4 was later replaced by the PV651 model. Volvo simultaneously started production of buses and in 1934 launched its first bus, B1. In 1935, AB Volvo was involved in the Stockholm Stock Exchange and traded a Nasdaq Stockholm-VOLV B. The company had acquired Pentaverken, an engine company, and started to aim car manufacturing on a large scale. Volvo entered the marine engine market with the help of the newly acquired Pentaverken.
In 1942, Volvo acquired Svenska Flygmotor, a Swedish engineering company. The company was renamed to Volvo Aero and cooperated as a subsidiary. Volvo acquired Bolinder-Munktell, an agricultural and construction equipment manufacturer in 1950. In 1973, Bolinder-Munktell was renamed to Volvo BM. In 1979, Valmet purchased an agricultural division of Volvo BM, and later the construction division was restricted to Volvo Construction Equipment. In 1963, Volvo established Volvo Halifax Assembly, its first factory outside the country. The factory is situated in Halifax, Canada.
Road to Success
In 1970, Volvo collaborated with Renault, a French automobile manufacturer to develop cars. Volvo and Renault were under an agreement that devolved their relations. Renault assisted Volvo for their medium vehicles and Volvo shared their development and technology with Renault and this led to the development of the combined Research and Development facilities. But the merger was not accepted within the Volvo board which led to the dissolution of the merger in 1994. In 1978, Volvo Car was incorporated as a separate division. In 1990, Volvo was affiliated with General Motors, an American automobile manufacturer. In 1991, Volvo and Mitsubishi Motor, a Japanese automobile manufacturing company participated in a joint venture. In 1996, both companies simultaneously produced Mitsubishi Carisma and Volvo S40/V40.
In January 1999, Ford Motor purchased Volvo Car for $6.45 billion and was acquired under Premier Automotive Group, an organizational division under Ford Motor. Volvo AB and Volvo Cars hold the “Volvo” trademark equally. In November 1999, Volvo purchased a 5% stake in Mitsubishi Motors. But Volvo sold its stake to Daimler AG aka Mercedes after Daimler acquired larger stakes in Mitsubishi Motors. In January 2001, Volvo purchased Renault Vehicles Industrials and renamed the division as Renault Trucks. Renault holds 21.7% stakes in Volvo AB which is largest in Volvo AB Corporation. Volvo decided to enter and make a presence in the Asian market and so initially acquired 13% stakes in Nissan Diesel, a Japanese Truck manufacturer in 2006 and renamed and later owned the Nissan Diesel in 2007. The company was renamed to UD Trucks.
In 2010, Geely Holding Group owned Volvo Cars after the ownership of Ford Motors. Volvo sold Volvo Construction Equipment to Platinum Equity LLC, an American equity investment firm in December 2013.
Challenges
Evidently, having multiple point solutions poses many challenges for the Volvo Group, but it also causes misalignment with their core corporate values. For example, the Volvo Group core value of environmental care leads to goals to reduce energy usage in efforts to reduce the company’s carbon footprint. Truck maker Volvo Group is facing the prospect of recalling vehicles across several continents after admitting its lorries could be emitting higher levels of poisonous nitrogen oxide gases than is legal. Shares in the Swedish group fell 6 per cent after the company predicted a “material” cost from the issue, which is caused by the “emissions control component” in its vehicles wearing down faster than expected. Also, a full-time employee from one of the firms reviewed that “Senior management problems ignored and protected under the banner of diversity or ethnic background.” In India, the sales of bus segments are not satisfactory because the public are reluctant to travel by public transport due to the pandemic.
Failures
Diesel cars produced by manufacturers like Nissan, Hyundai, Citroen and Volvo have become embroiled in the emissions scandal, after they were found to emit higher levels of pollution in tests closer to real-life driving conditions than during EU emissions tests. The Volvo Group has detected that an emissions control component used in certain markets with stringent emissions standards is degrading more quickly than expected, reducing its ability to convert nitrogen oxides (NOx) as efficiently as intended, which in turn could cause the engines or vehicles to exceed emissions limits for NOx. On April 16 Volvo announced its launch of three new child seats that offer a wider range of protection for children up to the age of ten, but the National Highway Traffic Safety Administration (NHTSA) has banned the sale of these child seats in the U.S. because federal laws stipulate that child seats must fit in all car models and cannot be vehicle-specific.
Achievements
- In 1959, Volvo pioneered the 3-point safety belt that becomes an international life saver
- In 1981, Volvo BM invents the Automatic Power Shift (APS)
- Winner of the third Lifetime Achievement Trophy- Flanders Investment & Trade (FIT)
- Volvo XC60 luxury SUV was crowned the 2018 World Car of the Year
- Business Car Of the Year 2019 Denmark - Volvo V60
- Innovation Award – Volvo Care Key COTY Portugal 2021 ( For Safety)
Subsidies
- Volvo Trucks
- Volvo Construction Equipment
- Volvo Buses
- Volvo Financial Services
- Mack Trucks
CEOs
- Olof Persson
- Martin Lundstedt