Volvo 2010 Annual Report Download - page 16

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EN GLOBAL KONCERN 2010
Profitability is essential to ensure investments in
the development of new products and services
and a favorable return to the shareholders. The
Group’s brands shall increase customer satisfac-
tion by offering environmentally and cost-effi-
cient products and services.
Required scale achieved
During the past ten years, the Volvo Group has
grown on average 7.4% per year, both organically
and through acquisitions. The acquisitions have
been carried out in order to establish the Group
in new markets and in new product segments, as
well as to achieve economies of scale through
size. The average operating margin during the
period has been 3.9%.
Net sales
01 02 03 04 05 06 07 08 09 10
0
100
200
300
400
SEK bn
Net sales
Through its growth, the Group has achieved
sufficient size in mature markets with satisfactory
market shares. The size facilitates good econo-
mies of scale in most product segments.
Strong positions
The Volvo Group has strong positions from which
further to develop:
• No. 2 among Western manufacturers of heavy-
duty trucks
• No. 4 in construction equipment
• One of the world’s largest manufacturers of
heavy-duty diesel engines
• Strong positions also in the other business
areas
• Good market presence globally.
Future direction
Within the strategic area Profitable Growth the
future direction is:
• Continued organic growth in mature markets.
• Focus on increased sales of services and after-
market products.
• Products in market segments that open up pos-
sibilities to capture the rapid growth in Asia and
other growth markets.
• Realizing further synergies from acquired com-
panies.
• Increased cooperation with business partners.
In an industry characterized by economies of scale and which is undergoing consolidation,
profitable growth is a necessary condition in order to continue to strengthen competitive-
ness and to develop as a close partner to customers with high demands. There is particu-
larly strong growth potential in supplemental business relating to service and to services in
which significant effort is invested to give the customer a more complete offering.
The Volvo Group’s acquisitions and divestments
2008 Joint venture with Eicher Motors of India within trucks and buses.
2007 Acquisition of Igersoll Rand’s road development division.
2007 Acquisition of Ingersoll Rand’s road development division.
2006 Acquisition of Japanese Nissan Diesel (Now UD Trucks). Completed in 2007.
2005 Sale of the service company Celero Support.
2004 Acquisition of remaining 50% of the Canadian bus manufacturer Prévost.
2004 Sale of axle-manufacturing operations to ArvinMeritor.
2003 Acquisition of the truck and construction equipment dealers from Bilia.
2001 Acquisition of the truck manufacturers Mack and Renault VI.
1999 Sale of Volvo Cars to Ford.
1998 Acquisition of the excavator operations of Samsung Heavy Industries.
STRATEGY
Profitable Growth
A GLOBAL GROUP 2010
12