Investments for the future

Staying ahead in a competitive environment

The Volvo Group invests significant resources into research and development to find more efficient technologies and sustainable transport solutions that ensure viability and competitiveness. It is equally important to invest in organizational efficiency – to ensure that we are able to secure the means needed to stay ahead.

Investments in research and development

To remain competitive in the market, we need to continue offering products and services developed with a focus on our customers’ demands, including environmentally-enhanced products. It is crucial to our success that our employees possess the right skills and competencies and for us to continue to invest in research and development (R&D).

We are constantly working on improving product performance. Our R&D is long-term, focusing on breakthrough technologies and seeking to reduce the environmental impact of our products and to develop sustainable transport solutions. Our investments in R&D have remained relatively high over the last economic cycles.

In 2011, investments amounted to SEK 13.3 billion, compared with SEK 13 billion in 2010. 

In 2011, investments amounted to SEK 13,300 M.

A large part of our R&D investments are related to reducing engine emissions and lowering fuel consumption. Most of our R&D is conducted in Sweden, France, the US and Japan.

In 2011, governmental grants amounting to SEK 783 M (472) were received of which SEK 775 M(413) was reported in the income statement. Tax credits are included at SEK 545 (204) M, related to product development in France and the US.

The grants were mainly from the European Commission and the Swedish Government.

Some R&D investments in specific projects are done by Volvo Group's venture capital company Volvo Technology Transfer (VTT). VTT creates value by developing and supporting new businesses of relevance to the Volvo Group.

Since 1997, VTT has made investments in various fields including environmental technologies and sustainable businesses.

Our R&D is long-term, focusing on pioneering technologies and seeking to reduce the environmental impact of our products and to develop sustainable transport solutions.

Investments in production facilities

During 2011, investments in property, plant and equipment amounted to SEK 8.5 (7.1) billion. Major investments related to new product programs, development costs and adapting production facilities.

Focus on internal efficiency

To continue to be successful we not only need to invest in product development and research, we also need to ensure that the Volvo Group organization is empowered and able to work as efficiently as possible. Our focus is on reducing production costs and costs related to sales and administration, as well as making product development and other processes more efficient to increase profitability. We continuously work on increasing the efficiency of our production system to increase productivity. Furthermore, a resource-efficiency approach is well integrated in our culture and is an important priority ahead.

Product development and growth

Moving forward, our strategy focuses mainly on organic growth rather than acquisitions. At this point, we have achieved critical volumes in most markets and in most product segments. We will devote development resources to the design of cost-effective products based on shared architecture and technology. We are intensifying our product development activities to be able to launch cutting edge products in the coming years.

Developing skills

In addition, we are committed to investing in internal efficiency and productivity in all parts of the Group to improve profitability. Continued work on our strategic focus areas – skills, leadership, workplace safety, health and wellbeing and company culture – will help us attract and retain employees to meet future challenges.

Our products, services and transport solutions are developed in close cooperation with our customers with the aim of improving their productivity and profitability.

Customers in focus

Our products, services and transport solutions are developed in close cooperation with our customers. We believe that the reliability, endurance, driving performance, high fuel efficiency and high environmental performance of our products really do improve our customers’ productivity and profitability.

We aim to be number one in customer satisfaction and our customers' closest business partner. All companies in the Group measure customer satisfaction.

We have different approaches for customer feedback across the Group. Each product company has a database system for handling complaints, orders, customer services, quality requests, dealer quality requests and so forth. The information contained in this system is used in our product development process. Our truck customers can contact our Action 24 service to receive support or to ask questions, such as where the closest workshop is located.

We also conduct a Global Brand Tracking Survey to measure customers’ perception of the Group's brand. This is based on interviews with decision-makers in selected key markets, including customers and non-customers.

More than 99% of the employees in the Volvo Group work in operations certified by a third-party auditor in accordance with the quality management system ISO 9001:2008. We recognize the importance of a strong dealer network to provide our customers with the best availability and service and we have made significant investments in these aspects over the years.

When dealing with our large customers we are noticing an increase in questions on our CSR performance.

Did you know?

More than 99% of employees in the Volvo Group work in operations certified by a third-party auditor in accordance with the quality management system ISO 9001:2008.

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Sustainable investments
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Charts

Research and development costs

 

Capital expenditures, Industrial Operations