Volvo 2006 Annual Report Download - page 17
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Profitable growth
Since 2001, the Volvo Group has had an average annual growth rate of
7 percent, which has been achieved through both organic growth and acqui-
sitions. The Volvo Group’s objective is to continue growing with focus on
profitability. The growth target is 10 percent annually over a business cycle,
which will be achieved through organic growth and through acquisitions at
approximately equal proportions.
Expanding geographic coverage and product offering
The Volvo Group holds established positions in markets in Europe and North
America. Today, however, the most rapid growth is occurring in markets
where the Group had very little business only ten to 15 years ago. In growth
markets, a stronger position and increased market shares are to be achieved
by attracting new customers and through strategic alliances. The Group is
making large investments in the dealer and service networks and concur-
rently carrying out a number of acquisitions. The aim is for markets outside
Europe and North America, such as India, Japan, China and Russia, to
account for a substantial portion of the Group’s total sales in the long term.
The aim in established markets is for an expanded customer offering,
with an increased proportion of sales in the aftermarket and a high propor-
tion of services to contribute to achieving the growth target. Strong brands
increase customers’ trust and create loyalty to the Group’s products and
services, thereby supporting profitable long-term growth.
Activities during a business cycle
The sectors in which the Volvo Group operates are exposed to economic
fluctuations. The Volvo Group endeavors to actively handle both upswings
and downturns in each sector to achieve better profitability. The strategy of
developing aftermarket services and growing in new markets enables the
Group to achieve a more favorable balance between all the phases of a busi-
ness cycle.
10%
Volvo’s aim is to grow by 10 per-
cent annually. Growth will be
achieved organically as well as
through acquisitions.
1
A global group 2006 13