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Volvo Group names insider as new CEO

Sweden's Volvo Group has appointed Olof Persson, current head of Volvo Construction Equipment (Volvo CE), to take over as the heavy vehicle maker's new CEO following the departure of Leif Johansson.

Published: 16 March 2011 08:50 CET
Volvo Group names insider as new CEO

“During his time at Volvo Aero and Volvo Construction Equipment, Olof Persson has gained the right experience and demonstrated the characteristics that make him highly suited to take over as President of AB Volvo and CEO of the Volvo Group,” Volvo board chair Louis Schweitzer said in a statement.

Persson will take over the reins at Volvo on September 1st when Johansson, who has headed Volvo Group since 1997, retired.

However, the two will work in parallel starting on May 1st, when Persson is promoted to Executive Vice President and deputy CEO.

“Naturally, it is both an honor and a challenge to be provided with the opportunity to lead Sweden’s largest company,” Persson said in a statement.

“Volvo is a company with tremendously knowledgeable and committed employees, with a unique culture and with many strong and exciting brands and I am truly looking forward to the task.”

Persson’s appointment was welcomed by Mikael Sällström, chair of the Volvo chapter of the IF Metall union.

“We support this. We’ve known him for some time and think it’s going to be good,” he told the TT news agency.

Persson has long been mentioned in speculation about who would succeed Johansson.

He’s been a member of Volvo’s executive team since 2006, first as CEO of Volvo Aero, before taking over as CEO of Volvo CE in 2008.

Prior to coming to Volvo, Persson also served as the head of a division of Canadian aircraft manufacturer Bombardier.

Volvo Group is Sweden’s largest company measured by turnover, which reached 265 billion kronor ($41.3 billion) in 2010.

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VOLVO

Sweden’s Volvo regains strength after pandemic puts brakes on earnings

Swedish truck maker Volvo Group was hit by a sharp drop in earnings due to the coronavirus pandemic, but business rebounded at the end of the year.

Published: 3 February 2021 12:21 CET
Sweden's Volvo regains strength after pandemic puts brakes on earnings
Volvo Group CEO Martin Lundstedt. Photo: Adam Ihse/TT

In 2020, the group saw “dramatic fluctuations in demand” due to the Covid-19 pandemic, chief executive Martin Lundstedt said in a statement.

For 2021, Volvo raised its sales forecasts in its trucks division – its core business – in Europe, North America and Brazil.

However, it said it also expected “production disturbances and increased costs” due to a “strained” supply chain, noting a global shortage of semiconductors across industries.

The truck making sector is particularly sensitive to the global economic situation and is usually hard hit during crises.

In March, as the pandemic took hold around the world, Volvo suspended operations at most of its sites in 18 countries and halted production at Renault Trucks, which it owns, in Belgium and France.

Operations gradually resumed mid-year, but not enough to compensate for the drop in earnings.

With annual sales down 22 percent to 338 billion kronor (33.4 billion euros, $40 billion), the group posted a 46 percent plunge in net profit to 19.3 billion kronor (1.9 billion euros).

Operating margin fell from 11.5 to 8.1 percent.

However, the group did manage to cut costs by 20 percent.

“We have significantly improved our volume and cost flexibility, which were crucial factors behind our earnings resilience in 2020,” the group said.

Volvo's business regained strength in the second half of the year.

“Customer usage of trucks and machines increased when the Covid-19 restrictions were eased during the summer and this development continued during both the third and fourth quarters,” it said.

“Both the transport activity and the construction business are back at levels on par with the prior year in most markets.”

For the fourth quarter alone, the company reported a 38-percent rise in net profit from a year earlier.

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