Volvo Cars will today, during an event in
Stockholm, reveal the strategic steps to long-term build a company capable of
an EBIT margin beyond 8 per cent with strong cash flows.
The company will outline clear strategic
answers to the car industry’s challenges: regionalised product offers and
governance model, focus on growth through flexible electrification, leveraging
the unique synergies with Geely, and a transformation from selling cars to
delivering complete customer offers.
As part of its Strategy Update, Volvo Cars will
unveil its largest-ever product offensive, with 13 new and regionally tailored
electrified cars. As markets increasingly deglobalise through technology
restrictions, trade tariffs and diverging customer preferences, Volvo Cars is
turning regionalisation into a competitive advantage.
As the seven new cars for Western markets will
benefit from investments already made in the SPA2 and SPA3 platforms, the
product push means that investments in technology and manufacturing will
decrease from today's levels. In China, Volvo Cars will leverage its unique
synergy potential through shared platforms, a software stack for China as well
as common parts and a common supply chain to develop six all new China-specific
models.
As a result, Volvo Cars estimates that many of
its upcoming models will require much lower investment per car, compared to
previous first-car-on-platform launches such as the EX60. And as more
electrified cars move to SPA-based or shared hybrid platforms, profit margins
per car will increase significantly as well.
The company also expects additional savings
from synergies with Geely for hardware sourcing in Europe and China. By 2030,
Volvo Cars aims to achieve around 30 per cent full commonality in parts, up
from 10 per cent currently. The company estimates this to contribute
approximately 5 per cent of material cost savings by 2030, beyond generating
additional indirect savings.
It will also continue to improve efficiency by
making corporate overhead leaner and strengthening productivity across the
value chain. Combined with the strategic actions announced today, these
measures create a clear roadmap towards building a company with growth,
stronger profitability and cash generation.
“The challenges for the car industry are
immense, but our strategy gives a clear answer to how we adapt to these and our
ambition is to be the leading premium car brand,” says Håkan Samuelsson, president and CEO. “With a regionally
optimised product portfolio, unique synergies, electrification and new levels
of efficiency, we will build a company capable of reaching beyond 8 per cent
EBIT margins.”
The Volvo Cars Strategy Update, an event for
investors and media in Stockholm, takes place between 9-12 CET and will be
livestreamed online here.
Fr:
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