Volvo Group nabs CEO from Scania


Volvo swings axe after years of declining profit, appoints Swedish CEO

Volvo Group nabs CEO from Scania
New Volvo CEO Martin Lundstedt.

 

Manufacturing giant Volvo Group has elected former Scania chief executive officer (CEO) Martin Lundstedt as its new president and CEO.

Replacing Olof Persson, who served as the company’s CEO from 2011 until this week when his four-year term came to an end, Lundstedt will take the reins in October.  

Volvo’s chief financial officer Jan Gurander will assume the role in the meantime.

Speaking in a company statement, chairman of the board of AB Volvo Carl-Henric Svanberg says that after an on-going restructure, the focus for the company is being profitable.  

"After three years of focus on product renewal, internal efficiency and restructuring, the Volvo Group is gradually entering a new phase with an intensified focus on growth and increased profitability," Svanberg says.

"This will be achieved by further building on our leading brands, strong assets and engaged and skilled employees all over the world."

Persson’s time in charge oversaw a company-wider overhaul that focused on a number of cost-cutting measures, including sizeable job cuts, to stem declining profit margins and streamline the company’s Volvo, Mack, Renault and UD brands.

However, financial figures from Volvo continued to show a shrinking operating margin from 8.7 per cent in 2011 to three per cent in 2014. Numbers that drew heavy criticism from shareholders.  

"Olof Persson has with energy and determination carried out an extensive change of the Volvo Group," Svanberg says.

"He has focused Volvo on commercial vehicles and sold unrelated businesses and assets to a value of over SEK 20 billion.

He introduced a functional organisation and paved the way for cost savings of SEK10 billion. He also concluded the agreement with one of China’s largest truck manufacturers, Dongfeng and led the company during the largest product renewal in the Group’s history."

While the period has been tough for Volvo and its former chief, news from the first quarter of 2015 was positive, with truck orders increasing three per cent and its margins rising to 9.1 per cent.

Sales for the quarter rose from 65.6 billion kronor to 74.8 billion kronor, pushing the net profit for the group to 4.25 billion kronor.

As with many truck companies during the quarter, the truck sales boost was off the back of a strengthening market in the US but held back slightly by weaker results in South America.

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