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4
COMMENTS BY THE CHIEF EXECUTIVE OFFICER
Volvo’s goal is to establish a partially new,
stronger Volvo focused on commercial
products
At an Extraordinary General Meeting held on March 8, 1999, Volvo’s share-
holders approved the sale of Volvo Cars to Ford Motor Company. As a result of
this decision, Volvo becomes a Group focused entirely on the commercial prod-
ucts segment and related services. The background to the sale is that a thorough
analysis of the future demands that will be placed on car manufacturers shows
that Volvo Cars would benefit from being integrated in a larger automotive entity,
where it could enjoy the subsequent economies of scale, and that for some time
we have expressed the ambition to expand in the commercial products field.
As a result of the sale, Volvo Cars is incorpo-
rated in an industrially correct and financially
strong environment. Concurrently, Volvo’s com-
mercial vehicle operations gain the full attention
of management and improved financial conditions
to pursue its strategy of securing a position as a
world-leading supplier in a growing market for
products and services for commercial transport.
The sale marks the close of an era in Volvo’s
history, and we are moving into a new one. Prior
to this, I wish to express my greatest respect for
the work carried out within Volvo Cars, as a
result of which the company today stands strongly equipped with an attractive
product program that appeals to customers worldwide. The employees of Volvo
Cars have every reason to be proud of their accomplishments.
In the case of the Volvo Group, there is another side to the sadness that nor-
mally accompanies when breaking up an entity. The Volvo Group now being
formed is a more focused unit, which for many years has demonstrated its ability
to successfully compete in the world market for commercial products and services
– a market that is growing. Historically, Volvo’s profitability in the area of com-
mercial products has been higher than in the car operations. We are now facing
a stimulating task of applying our combined industrial and financial resources to
build the future of a Volvo which is strong as a result of a unique breadth in prod-
uct range, highly technical skills, broad geographic coverage, a respected trade-
mark and years of experience in the transport vehicle field. In other words, we
have a strong foundation to build on. However, this does not imply that we can
rest on our laurels.