Volvo 1999 Annual Report Download - page 4

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Com m ents by the Chief Executive Officer
An eventful year leading to a successful future
2
1999 was an extraordinary year and the early part of 2000 has not been less eventful.
We sold the passenger car business in the first quarter of 1999, made a bid for Scania
last August and withdrew the bid in March of 2000.
We withdrew the bid because the European Union Commission prevented us from
implementing the transaction.
I regret that the EU Commission is stopping our plans for reasons that appear to be
in conflict with the concept of the common market. The decision is, of course, also
disappointing, since Scania would have strengthened the Volvo Group very effectively.
But the Commission’s action does
not change our view of the manner
in which we should increase the
Group’s competitiveness and prof-
itability for the long term.
Our strategy remains firm.
Through both organic growth and
acquisitions, we want to achieve
greater benefits of scale and
broaden the range of products. This
applies to all five business areas.
With the strong market positions
we already have, combined with
our financial resources, we can
continue to be a driving force in
the consolidation that is under way
in the industry. O ur financial
position will also permit us to
repurchase Volvo shares, as the
Board of Directors plans to propose at the Annual General Meeting.
I will return to the subject of how we want to develop the Group, but I first want
to comment on the progress that was made in 1999.
Improved profitability
The economies in our most important markets, North America and Western Europe,
have been strong. In contrast, the growth markets – Eastern Europe, Asia and South
America – continued to be weak, although there were some signs of recovery. Under
these conditions, sales increased on a level with our growth plans.
JANUA RY1999 FEBRUARY
Volvo acquired
13% of Scania's
shares.
Agreement was
reached with Ford
covering the sale
of Volvo Cars.
For further description, see pages 22-23.
Volvo Trucks enters
cooperation agree-
ment with Schm itz
Cargobull.