Volvo

Aktiebolaget Volvo, known as the Volvo Group, is a Swedish multinational manufacturer based in Gothenburg. Its main business involves making, distributing, and selling trucks, buses, and construction equipment, along with marine and industrial drive systems and financial services. In 2016, its subsidiary Volvo Trucks ranked as the world’s second-largest producer of heavy-duty trucks. Founded in 1927, Volvo is among Sweden’s biggest companies by market value and revenue.

The Volvo brand name was first registered as a trademark in May 1911 for a new line of SKF ball bearings. The Latin word means “I roll,” from “volvere,” but SKF soon dropped the idea and used its initials instead. In 1924, SKF sales manager Assar Gabrielsson and engineer Gustav Larson decided to build a Swedish car tough enough for rough roads and cold winters. AB Volvo began operations on August 10, 1926, and after a year of preparing ten prototypes, started car production within the SKF group. The company considers 1927 its founding year, when the first car, a Volvo ÖV 4, left the factory in Hisingen, Gothenburg; only 280 cars were built that year. The first truck, the Series 1, launched in January 1928 and was an immediate success abroad. By 1930, Volvo sold 639 cars, and truck exports to Europe began soon after, though cars remained little known outside Sweden until after World War II. AB Volvo listed on the Stockholm Stock Exchange in 1935, and SKF sold its shares. In 1942, Volvo bought Svenska Flygmotor, later renamed Volvo Aero. Pentaverken, which made engines for Volvo, was acquired in 1935, securing engine supply and entry into marine engines. The first bus, the B1, appeared in 1934, and aircraft engines joined the product range in the early 1940s. Volvo also built the Stridsvagn m/42 tank. In 1963, the company opened its first assembly plant outside Sweden, in Halifax, Nova Scotia, Canada. In 1950, Volvo bought Bolinder-Munktell, a Swedish maker of construction and agricultural equipment; it became Volvo BM in 1973. In 1979, Volvo BM’s agricultural equipment business was sold to Valmet, and the remaining construction equipment operations later became Volvo Construction Equipment. During the 1970s, Volvo shifted focus from cars to heavy commercial vehicles, aiming its car division at upper-middle-class customers to boost profitability.

In 1977, Volvo tried to merge with rival Saab-Scania, but Saab-Scania refused. Between 1978 and 1981, Volvo bought Beijerinvest, a trading company in oil, food, and finance; by 1981, these sectors made up about three-quarters of Volvo’s revenue, with automotive accounting for most of the rest. In 1982, Volvo completed the purchase of White Motor Corporation’s assets. Collaboration with French manufacturer Renault began in the early 1970s. In 1978, Volvo Car Corporation was spun off as a separate unit within the group, and Renault took a minority stake, later selling it back in the 1980s after restructuring. In the 1990s, Renault and Volvo deepened ties, cooperating on purchasing, research, development, and quality control, and increasing cross-ownership. Renault helped Volvo with entry-level and mid-range vehicles, while Volvo shared upper-segment technology. A merger deal announced in 1993 was barely accepted in France but opposed in Sweden; Volvo shareholders and the board voted against it. The alliance ended in February 1994, and Volvo sold its Renault minority stake in 1997. During the 1990s, Volvo also sold off most non-vehicle and non-engine businesses. In 1991, Volvo partnered with Mitsubishi Motors in a joint venture at the former DAF plant in Born, Netherlands, called NedCar, which produced the Mitsubishi Carisma and Volvo S40/V40 from 1996. Volvo also worked with General Motors in the 1990s. In 1999, the European Union blocked a merger with Scania AB. Israel’s Merkavim is partly owned by Volvo.

In January 1999, Volvo Group sold Volvo Car Corporation to Ford Motor Company. Since 2010, Volvo Cars has been owned by Geely Holding Group. Both AB Volvo and Volvo Cars share the Volvo logo and jointly run the World of Volvo museum in Gothenburg.