Wednesday, January 27, 2016

Favourite Trucks Among the Road Haulage and Freight Sector Take More Independence

Volvo Group Makes Structural Changes to Commercial Vehicle Division
Shipping News Feature
SWEDEN – WORLDWIDE – Volvo is to change the structure of the Group’s truck organisation and create four separate units: Volvo Trucks, UD Trucks, Renault Trucks and Mack Trucks, each with profit and loss responsibility for their respective business. According to Volvo the change is to instil clearer commercial accountability and will also require changes to the Group Executive Board. Volvo manufactures some of the brands which include the most loyal of customers amongst the road haulage and freight transport community.

After several years of growth through acquisitions, followed by major restructuring programmes and cost savings, Volvo says it is now gradually entering a new phase with more intense customer focus and concentration on organic growth and improved profitability. Martin Lundstedt, President and CEO of Volvo, commented:

“This is an important change in how we conduct our truck business, with an expanded mandate for our sales organisations to control and develop their businesses with an explicit responsibility for profitability and organic growth. We will gain a simpler organisation in which decisions are made more quickly and in closer cooperation with the customer, while each truck brand will be represented on the Group Executive Board with shared responsibility for optimising Volvo Group’s overall truck business.

“The efforts in recent years to realise synergies between our various brands have yielded results and created the possibility to now make the Volvo Group the most desired transport solution provider in the world. The goal of the new governance model is for all of the Group’s business areas to be driven along the same distinct business principles, whereby each area can follow and optimise its own earnings performance in both the short and long term.”

The Group’s technology and product development organisation and production organisation for trucks will remain responsible for common development and production. In addition specific resources will be allocated to each brand. At the same time, purchasing for the truck operation will form a separate unit and will join the Group Executive Board.

Management insists that these organisational changes will not have any planned effect on the number of employees in the Group. The new organization will come into effect on March 1, 2016, when the Volvo Group will comprise ten business areas:

Volvo Trucks, UD Trucks, Mack Trucks, Renault Trucks, Value Truck & Joint Ventures, Volvo Construction Equipment, Volvo Buses, Volvo Penta, Governmental Sales and Volvo Financial Services.

Martin Lundstedt was taken on by Volvo who grabbed him from principal rival Scania, now a Volkswagen subsidiary, less than a year ago. Previous boss Olof Persson was ousted last April in an attempt to boost profitability at the world's second largest truck builder with a promise that there would indeed be a major push for profitability in 2016.