EXPANSION AND STRONG PRODUCTS

Sustainable Profitability

During the year, Volvo Cars showed sharply increased sales and growth in all markets – proof that the new strategy and the aggressive product plan have been well received, especially by the customers.

The full year 2011 presented a profit of 1.6 SEK billion, despite major investments in product development and the expansion of industrial capacity affecting profitability in the short term.

Expansion towards sustainable profitability
Today, Volvo Cars is a global growth company that is laying the foundation for long-term sustainable profitability. As the company is in a powerful expansion phase, this is also a time of tough margins. This was a challenge that was amplified in 2011 by the world’s currency fluctuations and more expensive raw materials.

Global sales increased by 20.3% (449,255 cars in total). Sales were mainly driven by strong demand for the 60 series. The fuel-efficient diesel engine models drove sales in Europe, while the XC series’ popularity continued with 36 percent of the total sales.

In 2012, the all new V40 is launched and the diesel-electric V60 Plug-in Hybrid will be delivered to the first customers at the end of 2012.

In 2014, the new Scalable Product Architecture (SPA) will be launched with a premier in the new XC90, and in parallel, the new four-cylinder VEA engines – Volvo Environmental Architecture – are being developed with higher performance and lower fuel consumption.

Strong growth in China
The volume target is to sell 800,000 cars in 2020. This will be done through a strong presence in the main markets of Sweden, the US and China while opportunities on the new emerging markets are fully leveraged.

In 2011, Volvo Cars grew by more than 54 percent in China, which is a strong indication that the company is on the right path.

Since the end of 2010, the presence in China has grown from a position with a national sales company to comprising a comprehensive organisation with a head office in Shanghai.

The sales network in China is growing and the construction of the new factory in Chengdu is in the final phases.

The supplier base in China will be optimised for the global market. Wherever the cars are developed and built, the focus will always be on quality and safety.

People-centric profile
Volvo Car Corporation is a small player in the global car industry. On the positive side, there is the potential for greater flexibility. A smaller company is more nimble and can be redirected fairly promptly. Meanwhile, a small company has fewer resources. It is imperative to make definite choices in research and development programmes.

Volvo Cars has always been an innovator in terms of technical solutions. Now, even more focus is placed on issues that offer customers added value. Volvo Cars puts people first, with the help of Scandinavian design, advanced engineering and intuitive cars.