Volvo 1997 Annual Report Download - page 14

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12
Board of Directors’ report
where sales financing which was formerly conducted as joint ventures is now
included in wholly owned subsidiaries during 1997. The outstanding 50% of the
shares of the unprofitable Brazilian sales finance company, Transbanco Banco de
Investimento, were also acquired during 1997. In January 1998 Volvo acquired
the truck leasing operation of NFC Plc, a British company.
Product introductions during the year
In May 1997 Cars introduced the Volvo S70 R and V70 R models as well as
the four-wheel-drive Volvo V70 R AWD. The Volvo V70 XC (Cross Country),
a further development of the Volvo V70 AWD, was presented at the Frankfurt
Motor Show in September. Two turbo alternatives to the Volvo S40 and V40 – a
T4 version and a light-pressure turbo – were also presented during 1997.
During the year Trucks introduced the Volvo 770 for the North American
market, a further enhancement of the Volvo VN that is equipped with the largest
cab that Volvo has ever built. The Volvo FH Globetrotter XL 70 was introduced
in Europe. This is an “anniversary model,” produced to mark Volvo’s 70th year as
a truck manufacturer. Buses’ new Volvo B7 R bus chassis was introduced inter-
nationally during the Spring of 1997 and Volvo Construction Equipment
launched a new family of machines in the mini-excavator segment.
Joint ventures with external partners
Volvo is seeking through joint ventures to establish broad-based “volume opera-
tions” in its development, production and distribution activities. One example is
Volvo’s joint venture with Mitsubishi which initially pertained to production
cooperation in the NedCar jointly owned passenger car factory in the Nether-
lands. New agreements between Volvo and Mitsubishi were signed during 1997.
These agreements pertain to deliveries from Mitsubishi of passenger car engines
with direct fuel injection, joint distribution of Mitsubishi light trucks in Europe
and joint distribution and servicing of marine and industrial engines in Europe.
In the supplier sector, there is a concentration on fewer suppliers of complete
concepts or modules. These suppliers are to an increasing extent establishing
operations close to Volvo’s production facilities. The Arendal manufacturing
park, adjacent to the Torslanda plant, where eight companies from three
countries have established production, is one example.
Volvo Inform ation Technology brings Group IT resources together
In 1997 Volvo decided to restructure its information technology operations and
organize all its resources in this area in a wholly owned subsidiary with 2,500
employees. The objective is to achieve more uniform IT systems within the
Group and to release resources for aggressive action in this area.
Millenium shift
Volvo has been working with the millenium shift problem in computer systems
for several years. Activities include internal computer systems as well as commu-
nications systems with suppliers. Volvo´s assessment is that the systems are well
prepared for the millenium shift.
Volvo invests in sales
financing as a m eans of
supporting its dealers and
marketing com panies.
The sector of the Group
based on heavy diesel
engines is offering new
custom er solutions in the
form of financing, insur-
ance and spare parts and
service contracts. Volvo
Cars is also establishing
wholly owned sales
finance com panies in
key markets.