The Volvo name is among the best-known in the international automobile industry, even if its sales fall well behind those of other US and European manufacturers. In particular the brand is renowned for its introduction in 1959 of perhaps the most significant development in automotive safety, the three-point safety belt, and it retains a reputation as one of the world's safest cars. The business has been entirely separate from Swedish truckmaker AB Volvo since 1999, when it was acquired by Ford. Following disappointing performance, it was put up for sale by its American owners a decade later and was eventually acquired in 2010 by Chinese manufacturer Geely for $1.5bn. The first Volvo model developed under Geely's ownership was the 2nd generation VC90 launched in 2014. Performance has recovered significantly since then, with volume sales reaching new highs every year. In a key development, Volvo stopped making traditional fuel-powered cars in 2019. All new models since then have been either hybrid or all-electric. Total registrations for 2019 hit a new high of 709,000 vehicles, making Volvo the #32 auto brand by global sales. Like all auto brands, though, it suferred a decline in pandemic-impacted 2020, with registrations falling back to 661,000. However, other manufacturers were hit even harder, allowing Volvo to rise two places in the global ranking to #30. The Volvo brand inhabits the lower end of the premium market, competing with Audi, BMW and others. Top-selling model the XC SUV - which accounts for around 70% of sales - is a solid challenger to BMW's X series and similar models. Polestar is a separate division, also headquartered in Sweden, which makes high-performance all-electric cars of its own as well as versions of selected Volvo models. China is Volvo's biggest market, accounting for a quarter of volumes, followed by the US (17% of volumes). A long way behind is Sweden (8%), followed by Germany and the UK. Those five countries combined account for almost two-thirds of sales. Revenues for 2019 hit a record €29bn (SEK 274bn) before retreating to approx €28.6bn (SEK 263bn) in 2020. Net income was approx €846m. Hakan Samuelsson is CEO.
Capsule checked 23rd April 2021
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Adbrands Daily Update 4th Oct 2021: Volvo announced plans to issue a public offering of new shares that could value the company at as much as $25bn. Details have not yet been decided, but the IPO could also involve the offering of some of parent Geely's equity. Volvo said it hopes to raise around $2.9bn, which will help to accelerate the automaker's transition to all-electric manufacturing. If all goes according to plan, it would represent a spectacular turnaround in Volvo's fortunes since it was acquired by Geely for less than $2bn. A $25bn valuation would be more than twice the size of Renault, a much bigger company by revenues and automobile sales. However, Volvo also still controls around 50% of high-performance electric car brand Polestar, which itself is heading towards part-public ownership following merger with investment vehicle Gores Guggenheim. Volvo's holding in Polestar alone would be worth around $10bn.
Adbrands Daily Update 20th Jun 2019: Volvo and agency Forsman & Bodenfors collected the Grand Prix at Cannes Lions in the Creative Strategy category with their innovative and philanthropic 'EVA Initiative' project. Because of Volvo's long-standing commitment to the highest standards of vehicle safety, it has more data about actual road traffic collisions since the 1970s than any other auto manufacturer. One crucial finding in its research was that in general women are more at risk in collisions, because the data from industry-standard crash test simulations mostly involves male dummies. As a result, Volvo made its huge library of real world research available to everyone via its website under the banner of EVA - or "Equal Vehicles for All", as well as simulations for specific female passenger types.
Adbrands Weekly Update 4th Jan 2018: Chinese auto manufacturer Geely, owner of the Volvo passenger cars business since 2010, took steps to forge closer ties with that brand's namesake and former parent, Volvo Group of Sweden, which makes heavy trucks under the Volvo and Mack brands. The two businesses have been separate companies for almost 20 years, when Volvo sold its passenger division to Ford, who later sold it on to Geely. Now the Chinese group will acquire a near-15% voting stake in Volvo Trucks from a private equity firm.
Adbrands Weekly Update 23rd November 2017: In a major escalation of its push into self-driving vehicles, Uber sealed a deal with Volvo to purchase up to 24,000 fully autonomous XC90 SUVs between 2009 and 2021 at a cost of over $1bn. The two companies are already running pilots in Pittsburgh, San Francisco and Tempe, Arizona with around 200 cars, each carrying a human back-up driver who can take over in case of an emergency. However, the new contract is for adapted fully driverless cars. The arrangement raises a big question about Uber's future strategy, since it implies a shift from its current business model in which it doesn't actually own its own fleet but sub-contracts to independent drivers. The Volvo deal is non-exclusive, allowing both partners to sign up with additional partners. Volvo is thought to be negotiating with at least one other potential service. "Our aim is to be the supplier of choice for autonomous drive, ride-sharing service providers globally," said CEO Hakan Samuelsson.
Adbrands Weekly Update 6th Jul 2017: Volvo Cars aims to be the first mainstream manufacturer to cut ties to the traditional internal combustion engine. From 2019, the company announced this week, all new cars sold by Volvo will be hybrid or electric. Five new fully electric launches are planned over the following two years, and all existing models will be converted to hybrid. CEO Hakan Samuelsson reiterated a previously announced target of selling 1m electric cars and hybrids a year by 2025. "When we said it, we meant it," said Samuelsson. "This is how we are going to do it." Volvo's bold promise coincided with disappointing 2Q sales from Tesla, pushing down that pioneering manufacturer's share price by as much as 7%. Though Tesla retains the lead for now in low-cost electric technology, legacy carmakers are likely to catch up quite quickly as a result of the advantages of scale. The real test will be whether consumer demand matches supply in less environmentally aware territories, not least the two key markets of US and China. According to industry-watcher WardsAuto.com, less than 1% of the record 17.5m vehicles sold in the US in 2016 were all-electric.
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