Important events

Termination of local assembly of Renault Trucks in Turkey
On August 20, the Volvo Group and the Turkish manufacturer Karsan agreed to end the contract for local assembly of Renault Trucks for the Turkish market before the end of 2013. The termination had a negative impact on the Volvo Group’s operating income of approximately SEK 95 M in the third quarter of 2013. The termination is made in connection with the change to the newly launched Renault Trucks range, which instead will be manufactured in France also for the Turkish market.

Volvo Group takes an important strategic step with the launch of Quester
On August 26, UD Trucks launched Quester, an all-new heavy-duty truck range developed specifically for growth markets. Quester will address new market segments in line with the Volvo Group’s truck strategy to increase sales by capturing profitable growth opportunities in fast growing markets across Asia Pacific and other regions. Production of Quester started in the third quarter of 2013 in Bangkok, Thailand. Besides serving the domestic market, the plant in Thailand will also serve as an export hub for South East Asia and beyond. In the near future, the range will be manufactured in China for the Chinese market and later on also in India.

The Volvo Group ranked as one of the world’s most sustainable companies
On September 16 it was announced that the Volvo Group once again qualifies for the Dow Jones Sustainability World Index (DJSI). The Volvo Group received a particularly good rating for its implementation of the environmental policy and management systems.

The Volvo Group announces comprehensive efficiency program linked to the strategy
On September 24 it was announced that the Volvo Group had decided to combine a number of actions into a Group-wide efficiency program. The program encompasses both reduction of white collar employees and consultants and efficiency enhancements in the global industrial system. It is estimated that the program will entail restructuring costs totaling approximately SEK 5 billion, whereof approximately SEK 0.5 billion is expected to have no impact on cash flow. The majority of the restructuring charges are expected to impact operating income during 2014. Savings are expected to amount to approximately SEK 4 billion annually, and will generate results gradually in 2014, with full effect achieved by the end of 2015.

Volvo Group to optimize truck ­manufacturing in Europe
On October 16 the Volvo Group announced a directional decision to implement changes in the European industrial structure for truck manufacturing. The aim is to enhance the efficiency and thus strengthen competitiveness. The intention is to, step-wise over the next two years, relocate cab trim operations from Umeå to Gothenburg, to concentrate the assembly of heavy duty trucks in Gothenburg to one line, and to concentrate the assembly of medium duty trucks to Blainville. The directional decision is expected to result in staff cutbacks and operational changes. The action corresponds to a minor part of the financial impact of the Group-wide efficiency program.

Staff and support function ­rationalization
As part of the Group-wide efficiency program the Volvo Group has made a directional decision to rationalize its staff and support functions worldwide to enhance efficiency and reduce costs. Approximately 2,000 white collar employees and consultants are expected to be affected by the rationalization, which is intended to be implemented starting in the beginning of 2014. The action is subject to union negotiation. The measure comprises a large part of the previously announced efficiency program.

Previously reported important events

  • New Volvo FM
  • New Volvo FMX
  • More fuel efficient engines launched in North America
  • Annual General Meeting of AB Volvo
  • New Renault Trucks Range
  • Volvo Trucks has renewed its entire European truck range and launched Euro 6
  • Volvo Group to increase warranty reserves

Detailed information about the events is available at www.volvogroup.com