Volvo 2007 Annual Report Download - page 58
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Please find page 58 of the 2007 Volvo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Volvo Trucks
– in the heavy weight league
In Beijing, preparations are in full swing for the next Olympic Games. The
effort has been called the country’s largest construction project since
the Great Wall of China. Work is going on around the clock in order to
be completed by the start of the Games in August 2008. Volvo Trucks
is helping to ensure that construction moves forward at record speed.
Ma Gui Chun is head of a company with 40
employees and has been working on the
Olympic project since September 2005. The
company owns and leases trucks to com-
panies that deliver cement to construction
projects in and around Beijing. When it comes
to the Olympic project, Ma Gui Chun has no
complaints. Everything has so far gone entirely
according to plan. ”We’re very satisfi ed with
our Volvo trucks. They are expensive com-
pared with the Chinese competitors, but for us
they have been a profi table investment. And
their quality far exceeds that of our domestic
trucks. Recently, we have had access to
24-hour service. This has ensured that we
have not fallen behind, since our trucks have
been continuously available.”
A successful year
The year was also characterized by several
records in markets outside North America for
Volvo Trucks, in order bookings, production,
deliveries and profitability. Demand has been
very high during the year and the order situa-
tion indicates a continued strong 2008. By far
the greatest increase in demand was noted in
Eastern Europe, including Russia. Many other
regions, for example South America, also
posted positive development.
As anticipated, a slowdown in demand was
experienced in North America due to signifi-
cant pre-buys of trucks equipped with US’04
engines during 2006. During the second half
of the year, the US economy also slowed,
resulting in reduced transportation needs.
Industrial investments
The very high level of demand in the rest of
the world resulted in signifi cant challenges for
Volvo’s production system. Despite taking
advantage of the benefi ts of a global produc-
tion system by, for example, producing truck
cabs in Brazil for the European market, cap-
acity limitations were unavoidable.
Excluding production in North America,
Volvo Trucks increased deliveries in 2007 by
20% compared with a year earlier. Despite
this, capacity could not meet demand, with
long delivery times to customers as a result.
To meet the growing demand, Volvo Trucks
is investing SEK 2.5 billion in measures to
increase capacity. This includes, among others,
a cab plant in Umeå, Sweden and establish-
ment of an assembly plant in Kaluga, Russia.
Close to the customer
Despite the heavily strained production sys-
tem, it can be noted that the quality level of
Volvo’s trucks is higher than ever. Customers
have never been so satisfi ed. A contributing
factor is also the continued effort to develop
the dealer network, which yielded results dur-
ing the year, with strong development in ser-
vice, maintenance and spare parts – perform-
ance that also contributed to the positive
profi tability trend.
Continued focus on the aftermarket and
aggressive investment in the dealer network
are important elements in Volvo Trucks’ strat-
egy. On the European market, there is an
ambition, for example, to increase the number
of Volvo owned service workshops by 15% up
to 2010.
At the same time, it is important to note that
it is not the trucks inherently that create
profi ts. It is the driver. Therefore, offering a
good driver environment based on an under-
standing of drivers and their work situation is
an important competitive factor – for the cus-
tomers and for Volvo.
Driving progress
In recent years, the spotlight has turned to the
negative aspects related to transports. Volvo
Trucks is focusing more intensely than ever on
increasing traffic safety and to reduce environ-
mental impact.
Volvo Trucks is a driving force in the truck
industry in the development of ever-increas-
ingly fuel-efficient diesel vehicles. The ambi-
tions with regard to minimizing the emission of
greenhouse gases are high.
During the year, Volvo Trucks presented
seven different demonstration trucks to high-
light the possibilities of CO2-neutral trans-
ports. The trucks can be operated on seven
different renewable fuels/fuel combinations
without any emission of fossil-based carbon
dioxide. Concurrently, intensive efforts are
being made in further development of hybrid
engines presented in 2006. Production of
trucks with hybrid technology is planned to
start in 2009.
CO2-neutral production
Great attention is also focused on environ-
mental actions in plants. It took two years,
EUR 10 M and a large portion of persistency,
but now Volvo Trucks in Ghent, Belgium, is the
Volvo Trucks is the second largest heavy-duty truck
brand in the world.
54 Business areas 2007