Volvo Shuffle the Deck

The global Volvo organisation is set to reorganise its business structure by the end of next month. The Volvo Group has announced it is introducing a brand-based organisation, which it says will give the global truck manufacturing giant clearer commercial accountability for the various truck brands.

 

The four separate units, Volvo Trucks, UD Trucks, Renault Trucks and Mack Trucks will each have profit and loss responsibility for their respective businesses. The make up of the group’s board will also be changed to include representatives from selected business areas.

 

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“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,” said Martin Lundstedt, President and CEO of Volvo. “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.”

 

These latest structural changes follow the process of major restructuring and cost savings undertaken by Volvo a couple of years ago under Lundstedt’s predecessor, Olof Persson, who resigned at short notice last year. According to a statement from the global HQ, Volvo is now entering a new phase with more intense customer focus and focus on organic growth and improved profitability.

 

“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,” said 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 optimise its own earnings performance in both the short and long term.”

 

This latest move can be seen as Lundstedt stamping his authority and style of management onto the Volvo Group. Until joining the Volvo Group he had spent most of his working career at Scania, Volvo’s bitter rival in Sweden, and may be bringing some of the Scania management philosophy across with him.

 

Volvo’s technology and product development organisation and production organisation for trucks will remain responsible for common development and production across the brands. Purchasing for the truck operation will form a separate unit and is set to join the board. The new organisation will come into effect on March 1.

 

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