Volvo Cars Group Annual Report 2017

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Designed around you
Designed around you

Designed Around You

Our human centric focus is at the heart of everything we create.

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2017 In Brief

7.0%

Retail sales up to 571,577 (534,322) units

16.6%

Net revenue increased to MSEK 210,912 (180,902)

14,061

Operating income (EBIT) increased to MSEK 14,061 (11,014)

-3,800

Cash flow from operating and investing activities decreased to MSEK -3,800 (6,515)

38,000

Average number of employees increased to 38,000 (30,400)

30%

T8 Plug-in Hybrid sales increased by 30% compared to last year

Our Presence

50%

Europe

 

Sites

Ghent

Car production

Models:

S60, S60 Cross Country, V60

V60 Cross Country, V40,

V40 Cross Country, XC40

Gothenburg (HQ)

EMEA headquarters

R&D and design centres

Car production

Models:

V60*, V60 Cross Country*, V90

V90 Cross Country, XC60, XC90


*Planned start of production 2018

50%

China

 

Sites

Chengdu

Car production

Models:

S60L, XC60

Daqing

Car production

Models:

S90

Luqiao

Contract manufacturing*


*Planned start of production 2019

Shanghai

APAC headquarters

R&D centre

50%

Us

 

Sites

California

R&D and design centres

Charleston

Car production*


*Planned start of production 2018

New Jersey

Americas headquarters

50%

Other

 

Sites

Bangalore

Assembly factory

Kuala Lumpur

Assembly factory

Retail Sales

Sales per Model

50% Europe
20% China
16% US
14% Other
 
 
 
 
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Bangalore

Assembly factory

California

R&D and design centres

Charleston

Car production*


*Planned start of production 2018

Chengdu

Car production

Models:

S60L, XC60

Daqing

Car production

Models:

S90

Ghent

Car production

Models:

S60, S60 Cross Country, V60

V60 Cross Country, V40,

V40 Cross Country, XC40

Gothenburg (HQ)

EMEA headquarters

R&D and design centres

Car production

Models:

V60*, V60 Cross Country*, V90

V90 Cross Country, XC60, XC90


*Planned start of production 2018

Kuala Lumpur

Assembly factory

Luqiao

Contract manufacturing*


*Planned start of production 2019

New Jersey

Americas headquarters

Shanghai

APAC headquarters

R&D centre

Global Stories

Global Stories is a website for everyone who is interested in Volvo Cars.

For more information visit the website

New Customers

In Shanghai, the explorers get to meet a customer with a passion for sports cars. In the US, they get insights about how we approach customers.

Business

The explorers go to Charleston to see the new plant. But first Swedish engineer Anton faces something he never has experienced before.

People

Mark shows the other explorers a hidden gem in Los Angeles. The explorers meet to sum up their experiences from last year.

Volvo Cars Explorers

Ceo Comment

Future Mobility

We are shaping the future of changes driven by technology shifts, digitalisation and consumer behaviours. Using our strong heritage in safety, well-founded technology competence, innovativeness and ability to meet consumer needs, we will continue to embrace and invest in these areas.

Electric Leading the way

From 2019, every new Volvo car will be launched with an electric motor, embracing fully electric, plug-in hybrid and mild hybrid cars.

Autonomous At the forefront

We believe that we are at the forefront of AD development, and that we are uniquely positioned in this area.

Connected Joined forces

Through in-house developed solutions and smart collaborations with major players in the market, we provide an intuitive in-car control system.

background image

Strategy

A Company with Purpose

Everything we do starts with people. We understand people. We protect what is important to them and want to make them feel special. We take pride in our role within society and recognise our commitment towards the environment. We innovate to make people’s lives better and less complicated. Our human centric focus is at the heart of everything we create.

Corporate Objectives

Attractive Products

Employer of Choice

True Premium Alternative

Growth and Sustainable Profitability

Mission

Our mission is to be the world's most progressive and desired premium car company and to make people's lives less complicated.

Brand Strategy

Scandinavian design is focused on minimising the design and keeping the surfaces visually clean, and most importantly, designing around people and their needs.

Robin Page
Senior Vice President Design

People Strategy

Volvo Cars' success depends on our people. I am proud being a part of a company that puts people at the heart of everything we do, and that drives innovations that improve people's lives. I firmly believe those values are crucial for being regarded as the Employer of Choice.

Hanna Fager
Senior Vice President Human Resources

Our Approach to Sustainability

Care for people and the environment runs through Volvo Cars' history. We are guided by our Sustainability Program Omtanke, which runs through our corporate strategy, and is vital to our future success.

Stuart Templar
Director Sustainability

Strategic Focus Areas

Volvo Cars focuses on six strategic focus areas. We are convinced that successful execution of tasks within these areas will support the continued development of the company, value creation and growth.

1

Nimble organisation to further drive profitability improvement

  • Streamline organisation and processes
  • Utilise the strengths and possibilities from digitalisation
  • Capture full potential throughout the value chain
  • Act fast on emerging opportunities
  • Carefully assess how we invest and allocate our resources

Improved Profitability

 

Operating income (EBIT) at MSEK 14,061

2

Further strengthening our brand

  • Build on our world-class safety
  • Be true to our human centric brand strategy
  • Continue the ambitious renewal and expansion of our model portfolio

SUV Lineup Completed

XC

With the launch of the new XC40, the full SUV line up was completed

3

Lead transformation to electrification and autonomous driving

  • Make future mobility safe, emission-low and convenient
  • Lead transition to electrified vehicles and phase out of diesel engines
  • Build on our safety heritage and human centric values when developing autonomous driving Level 4 features
  • Leverage our strong position in Advanced Driver Assist Systems when developing to bring autonomous driving Level 4 to market

Investments in the future

 
investments

We continued investing in our plants and R&D including electrification, autonomous driving, connectivity, consumer experiences and design

4

Digitalisation to create value for consumers

  • Digitise our core through a secure and scalable cloud infrastructure, laying the ground for new digital offerings
  • Through digitalisation, set a new standard of premium experience through launching highly attractive convenience services that makes people’s lives less complicated
  • Establish smart collaborations to bring leading progressive products and services to market
  • Develop and launch new subscription based mobility offerings
  • Excel in sales and services

New ways to consumers

Innovative Platforms and Services

Our subscription service Care by Volvo was launched and implementation of the Retail and Consumer Experience Platform started

5

Leverage our global presence

  • Ramp up US manufacturing capability
  • Optimise operational processes and logistics flows for our global footprint
  • Leverage our global footprint to respond to new market trends and changing consumer needs

Expanded Global Presence

S90

We started exporting the S90 to both the US and Europe

6

Leverage strength based leadership to conduct responsible and sustainable business

  • Leverage strength based leadership and organise ourselves so employees can utilise their strengths
  • Gather people around missions and topics to create the best results
  • Ensure long term business relationships through maintaining our truly responsible business conduct

Strengthened Competencies

7,600

We strengthened our workforce to an average of 38,000 (30,400)

Creating Value

Creating sustainable value and growth is achieved by investing, and utilising our resources, in a sustainable way throughout our value chain with concern for people, society and the environment in which we operate.

Resources

Product Creation

Design, Technology, Future Mobility, Procurement, Products

Manufacturing & Logistics

Consumer Experiences

People

Society

Impact

Volvo Experiences

Everything we do starts with people. We invest, design, innovate, manufacture and sell products and services to make people’s lives better and less complicated.

You could hear the wind draft from that huge truck passing by. I was in shock. We made it.

Linda Gustafsson

Volvo Car Driver

What makes me proud of working for Volvo Cars is the standard and image the company has set since 1927 – from my perspective the number one focus is still safety and I appreciate the concern for people.

Tamara Thompson

Audit Team Member

With the limited time that I have, it feels good that everything about my car is hassle free.

Jennie Sundström

Care by Volvo Customer

After working for 13 years at Volvo Cars, I believe some credibility follows when I say that Volvo Cars is able not only to attract talented people, but also to develop and retain them. It is actually quite simple – when you feel the company commits to you, you also commit to the company. And when you do, great things happen.

Carl Fredrik Olsson

Director Group Financial Planning

The mantra “Designed Around You” applies as much to the Graduate Program as it does to Volvo Cars’ products. This means the more commitment and initiative you demonstrate, the more you get back. A lot is up to you, but there are almost no limits to what you can get involved in and experience.

Fernando López

Volvo Cars Global Graduate Program

Being part of a global team, delivering true top user experiences to the Chinese customers, is really exciting.

Baojun Xie

Senior Manager Driver Interaction, Infotainment and Accessories