AB Volvo

Volvo Group Mission Statement: By creating value for our customers, we create value for our shareholders. We use our expertise to create transport-related products and services of superior quality, safety and environmental care for demanding customers in selected segments. We work with energy, passion, and respect for the individual. The Swedish firm Svenska Kullagerfabriken (SKF) forms a subsidiary called AB Volvo to investigate the manufacturing of cars. Company gains full independence from SKF, and its stock is listed on the Stockholm exchange. New assembly plants open: for cars in Torslanda; for trucks near Brussels, Belgium. Volvo Construction Equipment is created after Volvo buys out former joint venture partner. Company gains full control of a former joint venture in heavy trucks with GM, which is renamed Volvo Trucks North America, Inc. Volvo acquires Renault S.A.'s heavy-truck business, including Mack Trucks, in exchange for a 15 percent stake in Volvo. Volvo began as a subsidiary of AB Svenska Kullagerfabriken (SKF), a large Swedish industrial company. In 1914 Scania Vabis ceased production of what had been Sweden's only domestically built automobile to concentrate on more profitable trucks. A year later, with the encouragement of the Swedish Association of Engineers and Architects, SKF began a confidential study of the feasibility of manufacturing its own car. Assar Gabrielsson and Gustav Larson started the project. Gabrielsson, who had represented SKF in France and the United States, was a ball bearing salesperson who had closely studied American automobiles. Larson was an engineer with substantial experience in Britain, having worked for the English company White & Poppe. SKF named the secret project Volvo--Latin for "I roll"--a dormant product name the company had introduced in 1915 for a line of ball bearings. Independently incorporated in 1915, hence the title aktiebolaget, or "AB," the venture itself was only informally associated with SKF. The primary owners were Larson and Gabrielsson. After agonizing over dozens of designs, the two partners settled on a simple model that would negotiate Swedish roads, with their snow, mud, steep hills, and millions of potholes, especially well. The original design, a car called the GL, or "Larson," was assembled at an abandoned SKF ball bearing factory at Hisingen, near Göteborg, from parts ordered out of various supplier catalogs from throughout Europe and the United States. The first production model, an öV4, later called the "Jakob," rolled out of the factory on April 14, 1927. To the horror of all involved, it was discovered that the differential had been misconnected, resulting in a car that had three gears in reverse and only one gear for forward motion. The mistake took only ten minutes to correct and Volvo survived the comical episode. With 60 workers turning out five cars a week, the company proceeded with plans to manufacture a truck. The first truck model, introduced in 1928, was, in fact, from a design that predated the GL by four months. Volvo trucks, equipped with in-line six-cylinder engines, became extremely popular. Whereas auto sales remained slow and their profits only marginal, the truck models consistently sold out. Profits from truck sales financed the operation for the next 20 years. Volvo's cars and trucks were extremely sturdy and, by many measures, better assembled than American and other European models. In what was the most effective advertising of the day, Volvo models won several speed and endurance tests, racing across Sweden and speeding from Moscow to Leningrad, and later winning contests in Monte Carlo and Argentina. Because both Larson and Gabrielsson detested automobile contests, however, Volvo refused to sponsor racers. Volvo introduced a six-cylinder model, the PV651, in 1929, which proved highly successful with the lucrative taxicab market, and a larger version was soon planned. The following year, with the introduction of