Volvo reorganizes business units

Feb. 3, 2016

The Volvo Group announced creation of four separate units: Volvo Trucks, UD Trucks, Renault Trucks, and Mack Trucks, each with profit and loss responsibility for their respective business. The Volvo Group executive board will be changed to include representatives from some of the group’s business areas.

“This is an important change in how we conduct our truck business, with an expanded mandate for our sales organizations to control and develop their businesses with an explicit responsibility for profitability and organic growth,” says Martin Lundstedt, president and chief executive officer of Volvo. “We will gain a simpler organization 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 optimizing Volvo Group’s overall truck business.”

After several years of growth through acquisitions, followed by major restructuring programs and cost savings, the Volvo Group is now gradually entering a new phase with more intense customer focus and focus on organic growth and improved profitability.

“The efforts in recent years to realize 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,” says Lundstedt. “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 optimize its own earnings performance in both the short and long term.”

The Group’s technology and product development organization and production organization for trucks will remain responsible for common development and production. In addition, specific resources will be allocated to each brand. Purchasing activities for the truck operation will be folded into a new unit and will join the Group Executive Board. These organizational 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, when the Volvo Group will comprise 10 business areas: Volvo Trucks, UD Trucks, Mack Trucks, Renault Trucks, Value Truck & JV:s, Volvo Construction Equipment, Volvo Buses, Volvo Penta, Governmental Sales, and Volvo Financial Services.