The Volvo Group (Swedish: Volvokoncernen; legally Aktiebolaget Volvo, shortened to AB Volvo, stylized as VOLVO) is a Swedish multinational manufacturing corporation headquartered in Gothenburg. While its core activity is the production, distribution and sale of trucks, buses and construction equipment, Volvo also supplies marine and industrial drive systems and financial services. In 2016, it was the world’s second-largest manufacturer of heavy-duty trucks with its subsidiary Volvo Trucks.[5]
Volvo was founded in 1927. Initially involved in the automobile industry, Volvo expanded into other manufacturing sectors throughout the twentieth century. Automobile manufacturer Volvo Cars, also based in Gothenburg, was part of AB Volvo until 1999, when it was sold to the Ford Motor Company. Since 2010 Volvo Cars has been owned by the automotive company Geely Holding Group. Both AB Volvo and Volvo Cars share the Volvo logo and cooperate in running the Volvo Museum in Gothenburg, Sweden.[6]
The corporation was first listed on the Stockholm Stock Exchange in 1935, and was on the NASDAQ indices from 1985 to 2007.[7] Volvo is one of Sweden’s largest companies by market capitalisation and revenue.[8]
History[edit]
Early years and international expansion[edit]
The brand name Volvo was originally registered as a trademark in May 1911, with the intention to be used for a new series of SKF ball bearings. It means “I roll” in Latin, conjugated from “volvere”. The idea was short-lived, and SKF decided to simply use its initials as the trademark for all its bearing products.[9]
In 1924, Assar Gabrielsson, an SKF sales manager, and Gustav Larson, a KTH educated engineer, decided to start construction of a Swedish car. They intended to build cars that could withstand the rigours of the country’s rough roads and cold temperatures.[10]
AB Volvo began activities on 10 August 1926. After one year of preparations involving the production of ten prototypes, the firm was ready to commence the car-manufacturing business within the SKF group. The Volvo Group itself considers it started in 1927, when the first car, a Volvo ÖV 4, rolled off the production line at the factory in Hisingen, Gothenburg.[11] Only 280 cars were built that year.[12] The first truck, the “Series 1”, debuted in January 1928, as an immediate success and attracted attention outside the country.[9] In 1930, Volvo sold 639 cars,[12] and the export of trucks to Europe started soon after; the cars did not become well known outside Sweden until after World War II.[12] AB Volvo was introduced at the Stockholm Stock Exchange in 1935 and SKF then decided to sell its shares in the company. By 1942, Volvo acquired the Swedish precision engineering company Svenska Flygmotor (later renamed as Volvo Aero).[9]
Pentaverken, which had manufactured engines for Volvo, was acquired in 1935, providing a secure supply of engines and entry into the marine engine market.[13]
The first bus, named B1, was launched in 1934, and aircraft engines were added to the growing range of products at the beginning of the 1940s. Volvo was also responsible for producing the Stridsvagn m/42. In 1963, Volvo opened the Volvo Halifax Assembly plant, the first assembly plant in the company’s history outside of Sweden in Halifax, Nova Scotia, Canada.
In 1950, Volvo acquired the Swedish construction and agricultural equipment manufacturer Bolinder-Munktell.[14] Bolinder-Munktell was renamed as Volvo BM in 1973.[15] In 1979, Volvo BM’s agricultural equipment business was sold to Valmet.[16] Later, through restructuring and acquisitions, the remaining construction equipment business became Volvo Construction Equipment.[14]
In the 1970s, Volvo started to move away from car manufacturing to concentrate more on heavy commercial vehicles. The car division focused on models aimed at upper middle-class customers to improve its profitability.[17]
Partnerships and merging attempts[edit]
In 1977, Volvo tried to combine operations with rival Swedish automotive group Saab-Scania, but the latter company rejected it.[9]
Between 1978[9] and 1981, Volvo acquired Beijerinvest, a trading company involved in the oil, food, and finance businesses. In 1981, those sectors represented about three quarters of Volvo’s revenue, while the automotive sector amounted for most of the rest. In 1982, the company completed the acquisition of White Motor Corporation‘s assets.[17]
In the early 1970s, French manufacturer Renault and Volvo started to collaborate.[18] In 1978, Volvo Car Corporation was spun off as a separate company within the Volvo group[19] and Renault acquired a minority stake,[9] before selling it back in the 1980s after a restructuring.[18] In the 1990s, Renault and Volvo deepened their collaboration and both companies partnered in purchasing, research and development and quality control while increasing their cross-ownership. Renault would assist Volvo with entry-level and medium segment vehicles and in return, Volvo would share technology with Renault in upper segments. In 1993, a 1994 Volvo-Renault merger deal was announced. The deal was barely accepted in France, but it was opposed in Sweden, and the Volvo shareholders and company board voted against it.[9][18] The alliance was officially dissolved in February 1994 and Volvo sold off its minority Renault stake in 1997.[9] In the 1990s, Volvo also divested from most of its activities outside vehicles and engines.[9]
In 1991, the Volvo Group participated in a joint venture with Japanese automaker Mitsubishi Motors at the former DAF plant in Born, Netherlands. The operation, branded NedCar, began producing the first generation Mitsubishi Carisma alongside the Volvo S40/V40 in 1996.[20][21] During the 1990s, Volvo also partnered with the American manufacturer General Motors. In 1999, the European Union blocked a merger with Scania AB.[9]
Refocusing on heavy vehicles[edit]
In January 1999, Volvo Group sold Volvo Car Corporation to Ford Motor Company for $6.45 billion. The division was placed within Ford’s Premier Automotive Group alongside Jaguar, Land Rover and Aston Martin. Volvo engineering resources and components would be used in various Ford, Land Rover and Aston Martin products, with the second generation Land Rover Freelander designed on the same platform as the second generation Volvo S80. The Volvo T5 petrol engine was used in the Ford Focus ST and RS performance models, and Volvo’s satellite navigation system was used on certain Aston Martin Vanquish, DB9 and V8 Vantage models.[22][23][24] In November 1999, Volvo Group purchased a 5% stake in Mitsubishi Motors, as part of a partnership deal for the truck and bus business.[25] In 2001, after DaimlerChrysler bought a large Mitsubishi Motors stake,[26] Volvo sold its shares to the former.[27]