|Type of paper:||Research paper|
|Categories:||Company Automotive industry|
This report focuses entirely on the performance of Volvo Group over the period ranging from 2015 to 2017. The information in this article is factual and well researched to give the reader the clear picture of the company. This report contains information concerning the finances, operational management, capabilities and the potential of the Group that is to offer information to investors in an effort to encourage and facilitate investments. The company has over the years developed into a great competitor over the region and our capabilities of dealing with different products have increased its profit margin. Like in our mission that states that where we are much focused in driving prosperity through transport solutions, Modern logistics is a prerequisite for economic welfare since transports help combat poverty. Prosperity in a country or society depends on many complex factors, and having the right transport solutions and developing effective transport systems are one element for economic competitiveness and social well-being. The new vision is for the Volvo Group to be the most desired and successful transport solution provider in the world. AB Volvo Group mainly deals with buses, construction equipment, trucks and Volvo Penta. We are going to evaluate the performance and operation of each product associated with Volvo Group.
Volvo Buses has had productive sales in a minimum of 85 countries. With more than 1,500 workers in dealerships and workshops. It is leading in the development of sustainable transport solutions in various countries. Volvo Buses was ranked among the world leading manufacturer of buses, coaches, and bus chassis. The products in which the Volvo Buses engages in ranges from; city buses, intercity buses, coaches and complete transport systems all around the globe. There are several brands of buses which include; Volvo' Prevos, Nova Bus, and UD Bus.
A wide range of buses is produced in North America, Asia, South America and Europe. There are more than 7,300 employees who work in these production facilities across the globe.
Electrified Buses Volvo has made numerous efforts to invest in turnkey system solutions for electrified buses. The services which are modified to meet the satisfaction of consumers include; vehicles, charging infrastructure, batteries, and repair and maintenance services. In North America, for example, has been a beneficiary of the product range which includes hybrid buses (Nova LFS HEV). Charging stations are being developed in various parts of the continent with ABB and Siemens, OppCharge, which have an open interface to enable the use of electric buses and charging infrastructure independent of manufacturer. In September 2016, the first complete system with four commercially manufactured electric buses, Volvo 7900 Electric, was sold to Differdange in Luxembourg. During the year, the equivalent system with electric hybrid buses was also sold to customers in Belgium, Luxembourg, and Sweden. Three electric concept Volvo buses and seven electric hybrid buses have been operating a regular timetabled service in Gothenburg, Sweden since June 2015, as part of the Electricity partnership. Buses and charging stations have accrued plenty of positivity among the countries which have adopted the technology. The buses do not emit smoke or pollute the environment, lower noise and are comfortable which have made users to appreciate them. There are other projects of electric hybrids which are ongoing in various countries in Europe.
The electric buses have shown a tremendous increase in sales since their establishment. Since the beginning of the year 2010, Volvo Buses have sold over 3,000 units of electric buses in less than six years. In 2016 alone, more than 520 units were sold from the beginning of the year up to the month of July.
In September 2016, the Pedestrian and Cyclist Detection System were adopted, which was intended to increase the safety for unprotected road users at bus stops and pedestrian crossings. The system works in such a way that can scan the surrounding with the help of fitted cameras and alerts can scan the surrounding area that the bus is approaching by sending out an artificial sound. If there is a risk in front of the bus, the bus horn is activated, at the same time as sounds and light signals warn the driver. The system will be introduced in Volvo's city buses during 2017. Volvo's driving system, Volvo Dynamic Steering (VDS) is hugely successful. A year after the launch, over half of all Volvo's coaches sold in Europe are equipped with VDS. During autumn 2017, the system will also be introduced in Volvo's city and intercity buses. A new complete bus was introduced in Europe. The bus has the largest bus chassis in the world which was developed for high capacity systems in Latin America. The bus has a length of 30 m and can transport a maximum of 300 passengers.
Volvo trucks on the other side are not a setback their production has been on the rise too. Their variety includes the heavy-duty trucks and light-duty trucks. The services offered include maintenance and repair services, financing and leasing. These activities have made Volvo Trucks be one of the world's largest manufacturers of heavy-duty trucks. This has created employment opportunities for over 50,000 employees on trucks alone.
The European market remains as the leading strong levels while South America has the largest truck demands. The global truck delivery declined by 8% in 2015, but it was projected to increase in the coming years. The truck market in Europe was strong in 2016 with around 300,000 registrations of new heavy-duty trucks, which registered an increase in demand compared to 270,000 registrations in 2015.This marked an increase of 10% in demand. Some customers renewing their fleets also drove demand for new trucks. The North American heavy-duty truck industry was in a correction mode in 2016 with low production in response to reduced demand and a reduction of elevated dealer inventories of new trucks. While decent economic conditions prevailed, retail deliveries were down 19% in 2016 compared to the exceptionally strong market in 2015. Virtually the entire decline was registered in the highway tractor segment. At the end of 2016, new truck inventories had come down to much healthier levels. However, there is still a used truck overhang which is expected to continue to dampen demand for new heavy-duty trucks in 2017.
According to (Jacyna & Merkisz, 2015) Electro mobility is fully in line with Volvo Truck's long term commitment for sustainable urban development and zero emissions. We believe in full electrification for urban distribution as a first step. However we are working with electrification for other transport applications. This is only the beginning."
Finally, Construction Equipment (CE) and Volvo Penta Volvo Construction Equipment have grown as the largest development of products. The company was founded in 1832 in Sweden. Volvo Construction Equipment is the world's leading manufacturer of articulated haulers and leading manufacturers of wheel loaders, excavators, road construction and material development. There are more than 13,500 employees. Volvo Penta operates in two businesses: Marine (leisure and commercial) and Industrial (off-road and power generation). In the marine segments, Volvo Penta aims to lead the industry, continuing to develop its innovative products and solutions. In the Industrial sectors, Volvo Penta will seek maximum leverage of Volvo Group assets in its total offer, and add value for customers in its application and integration expertise. Volvo Penta strategy was to work together and grow profit while increasing the capability of the business.
In 2016, the Volvo Group bought goods and services at a total value of SEK 205.9 billion from its suppliers across the world. Generally, Volvo Group source from suppliers closes to their production sites to ensure an efficient flow of supplies. The strategic priority of capturing Asia growth will further increase the focus on securing a responsible supply chain in that part of the world.
The company purchases responsibly and their business partnership results to the very high probability of a productive ending. This is mutual land the Volvo Group needs to respond to suppliers' expectations. Volvo group boast of suppliers highly valued and compliant, responsible and fair in a business environment.A continuous focus on these areas is essential to develop long-term commitments further. When it comes to the Volvo Group's expectations on suppliers the principles and minimum standards of responsible behavior are set out in our Code of Conduct.
AB Volvo has proved to be one of the leading companies in the world and their products are widely known by most if not all continents. There is a high probability of the company to widen its operations to most countries across the world. There are untapped markets especially in Africa and in the Middle East which can be a target of the future. The company has very high potential to increase further the number of countries which will be using their products.
According to the CEO remarks during the end of the financial years 2015-2017, The Company is focused on continuous improvements over the past decade, but they are determined to do more. They will put more emphasis on the ease of decision making and ability to adapt to market volatility. In order achieve this goal; each brand was trusted with the responsibility of its own commercial development and profitability. The goal is to have daily decision making as close to the customers as possible.
The company was working tirelessly on reinforcing and growing the service business which can reduce the impact of cyclical drops in vehicles sales volumes.
It's also in the same summit that the CEO pronounced that the company was to be focused on a new vision and mission that would improve productivity, broaden the target population as well as the company investments. The company adopted a new vision which is to be the most desired and successful transport solution provider in the world. To achieve this goal there is need to listen to the customers and understand their needs. Customer's success is at the heart of our strategy.
In the previous financial year, sale volumes were down in all markets except in Europe which recorded a great increase. Despite the drop in sales, we are financially strong with almost no net financial debt in industrial operations, pension liabilities excluded.
Deliveries of trucks decreased by 8% in the 2015/2016 financial year. This was mainly due to weaker demand in North America, South America, and other emerging markets. The lower net sales had a negative impact on earnings, but the company still realized overall profit due to a reduction in operational cost and improvement in productivity. There was also a balanced ramp down in North America and ramp-up in Europe.
The truck business had an increase in operating margin from 7.6% in the previous to 8.7% in 2016.The main highlight of the year was the launch of the electric powertrain which increased fuel efficiency, productivity, and reliability.
Volvo Buses is blazing the trail for the Volvo Group in electromobility, and since the launch of the first hybrid bus in 2010 more than 3,000 units have been sold. Volvo Buses' strong position in this area was most recently demonstrated by an order for the first series-produced fully electric buses combined with charging stations for an operator in Luxembourg. The Volvo 7900 Electric reduces energy consumption by 80% compared to a conventional diesel bus. In 2016 the European bus market continued to improve and North America was stable on a good level. In total Volvo Buses' deliveries in...
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