Operational risk

The profitability depends on successful new products

The Volvo Group’s long-term profitability depends on the Group’s ability to successfully launch and market its new products. Product life cycles continue to shorten, putting increased focus on the success of the Group’s product development.

Reliance on suppliers

The Volvo Group purchases raw materials, parts and components from numerous external suppliers. A significant part of the Group’s requirements for raw materials and supplies is filled by single-source suppliers. The effects of delivery interruptions vary depending on the item or component. Certain items and components are standard throughout the industry, whereas others are internally developed and require unique tools that are time-consuming to replace. The Volvo Group’s costs for raw materials and components can vary significantly over a business cycle. Cost variations may be caused by changes in world market prices for raw materials or by an inability of our suppliers to deliver.

The Volvo Group’s costs for raw materials and components can vary significantly over a business cycle

Safety risks

The Volvo Group has policies, routines and guidelines designed to help secure safe workplaces in all its operating locations. The Volvo Group has a process for handling issues related to workplace safety such as fire protection, emergency evacuation and so forth. Providing a workplace free from physical hazards is essential for ensuring the safety of the Group’s employees, their families, customers and visitors as well as of suppliers. Volvo Blue Risk assessment is a key tool used during site inspections. This assessment is reviewed and supported by the Corporate Security Function and serves as an input to the insurance program. Managers are responsible for keeping all workplaces free from potential risks and for ensuring that corrective action is promptly carried out whenever a risk is identified.

Ninety-seven percent of the production is certified in accordance with ISO 14001

Environmental risks

Forthcoming regulations on environmental issues related to the Volvo Group’s production sites are dealt with by the Environmental Committee. All sites have been audited by the Environmental Manager for the Volvo Group in order to identify potential risks. Furthermore, all production sites in the Volvo Group have an environmental manager who is responsible for working preventively to mitigate the consequences of an accident if it were to occur. All production plants must fulfill the Group’s requirements.

Ninety-seven percent of the production is certified in accordance with ISO 14001. This means that risks are managed systematically and preventively.