Overall challenges


In 2012, the Volvo Group celebrates 85 years. In 1927, the first series-produced Volvo car rolled off the production line at the Gothenburg plant. For 85 years, Volvo has developed pioneering products and services.

Much has happened since 1927. Volvo has developed from a small local industry to one of the world’s largest manufacturers of trucks, buses and construction equipment with more than 100,000 employees, production facilities in 20 countries and sales in more than 190 countries.

It is crucial to keep pace in a rapidly changing world. Today, it is more important than ever to understand the operating environment, how it impacts the Volvo Group and, first and foremost, to act on these changes to meet future transport needs. The next pages define some of the more significant challenges and the actions being undertaken by the Volvo Group to meet these challenges.

1. Population growth, urbanization and megacities
The population of the earth is ever increasing. In 2050, the population is expected to exceed nine billion. Since 2008, more than half the world’s population live in cities and in fifty years that figure is expected to have risen to two-thirds. The most intensive pace of urbanization is ongoing in Africa and Asia. In addition, the number of megacities and megaregions with populations exceeding ten million is growing rapidly. Approximately 20% of the world’s population is expected to live in cities with populations in excess of two million inhabitants by 2015.

This trend is leading to an increased need for transportation. Large quantities of goods, products and people are transported daily within as well as to and from cities. Cities, particularly major cities, have particular requirements for town and traffic planning. Furthermore, traffic jams as well as pollution and noise need to be addressed through specially adapted vehicles for urban environments.

2. Climate change, oil resources and alternative fuels
Climate change comprises one of the most complex and difficult questions of our time. Fossil fuel is the single largest source of greenhouse-gas emissions, which are deemed responsible for climate changes. For a long time, oil was considered a reliable source of energy but today oil use is a highly contested issue. This is primarily attributable to the environmental problems associated with oil but also since future access to oil is uncertain due to dwindling oil reserves and instability in the oil producing regions.

It is no longer a question of whether we have to convert to a fossil-free society; it is now a question of how this will be achieved and at what pace it will be performed. Major efforts have been made to develop the use of alternative, renewable-energy sources. However, the development of alternative fuels differs widely in different regions depending on the natural resources available, which, in turn, entails a challenge in the form of developing vehicles adapted for various differing types of fuel. The move towards large-scale use of renewable fuel is also dependent on political decisions to create the necessary infrastructure.

3. Shortage of natural resources and raw material
Population growth, a rapidly growing middle class and increased purchasing power leads to increasing numbers of people consuming in line with western consumption patterns. Mankind is utilizing an increasing amount of land and resources. More efficient use of resources is required and the recovery of a greater proportion of material is becoming increasingly important to secure access to material.

4. Safety and security
Traffic safety becomes increasingly important as transportation increases. The subject is a high priority for governments and institutions the world over. In the future, focus on safety in a broader sense will continue to increase because of military conflicts, crime, terrorism and natural disasters, which will impact the safety of drivers, vehicles and goods.

5. Competent labor
For many years, interest has waned for education and careers in the fields of mathematics, natural sciences and engineering in industrialized countries. However, the need for competent employees with these types of specialist skills will increase as the products and services are becoming increasingly sophisticated.