TOGETHER WE MOVE THE WORLD

VOLVO GROUP OVERVIEW 2016–2017 “Our solutions to global challenges are driven by THE GROUP: our mission to drive prosperity through transport MOVING LIFE solutions.” FORWARD

The world doesn’t stand still, nor • 200,000 industrial engines secure the world moving efficiently, safely does the Volvo Group. Since our electricity supplies for essential and cleanly. company started in 1927, we have services constantly innovated and delivered We need to take urgent action to far-reaching and long-lasting Our support services keep thousands combat climate change and its im- solutions to meet the needs of our of customers’ fleets on the road, con- pacts. The transport sector is part customers and society. tributing to global productivity and of the problem. We intend to make growth. Our marine engines power it part of the solution. Our solutions to global challenges commercial and leisure activities on Volvo Group aims to lead the way are driven by our vision and mission the world’s waterways. on alternative fuels, energy efficien- – to be the most desired and success- cy and low-emission products and ful transport solution provider in Together, the Volvo Group’s prod- production. the world – and to drive prosperity ucts and services literally do move through transport solutions. the world. The Earth’s natural capital is finite and resources are scarce. A KEY ROLE Like a circulatory system, GLOBAL CHALLENGES The world We take a whole lifecycle, and our trucks, buses, engines, construc- faces challenges that we cannot increasingly circular, approach. tion equipment and different, related ignore. Demographic growth and services are involved in several of urbanization, climate change, re- Over 1.2 million people die and the functions that most of us rely on source scarcity, safety and security, 50 million are injured each year in every day. and competition for skills are the road traffic accidents worldwide. global trends that most impact the In addition to increasing our products’ • 15 % of food in is delivered Volvo Group. safety, we increase skills and aware- by our trucks ness among drivers and road users. The world needs safe, affordable and • 10.6 million people worldwide can environmentally-enhanced transport Talent pools and educational oppor- be transported daily on our buses and infrastructure to support the tunities vary widely across global and coaches 9 billion people who will be living geographies. on Earth by 2050. Our programs develop our current • 300,000 units of our construction The Volvo Group’s City Mobility, colleagues’ competences and build equipment build and maintain cru- Bus Rapid Transit and zone man- future capacity in strategically cial infrastructure agement technology programs keep important markets.

2 3 1927 1959 1981 2001 2002 2004 2006 2007 2012 2013 2014 2015 The Start 3-point safety belt Automatic Power Shift Volvo I-Shift Renault Infomax Penta IPS I-SAM hybrid concept CO2-neutral trucks and plant I-See Dynamic Steering Dual clutch Electric Bus

Volvo is founded by Assar Volvo pioneers the 3-point Volvo BM invents the Auto- launches ’ vehicle IPS (Inboard A commercially viable option The Volvo Group is the first I-See reduces fuel con- An electronically controlled Volvo Trucks launches the Together with partners in dif- Gabrielsson and Gustaf safety belt that becomes matic Power Shift (APS). a revolutionary new auto­ management system Performance System) is in- for heavy vehicles such as vehicle manufacturer to pro- sumption for long-distance electric motor attached to first transmission on the ferent sectors, Volvo devel- Larson. Their aim: to pro- an international life saver. APS saves fuel and boosts mated transmission – Infomax is awarded the troduced, delivering around trucks and buses on routes duce seven CO2-neutral transport. Like an autopilot the steering shaft makes market with a dual clutch ops buses and infrastructure, duce safe, high-quality performance by constantly I-Shift. It calculates several Siemens Prize for Innova- 35 % better efficiency at with frequent braking and demonstration trucks. Also, system, it handles gear the truck driver’s job both system for heavy vehicles. on the way to an electrified vehicles. The first car rolls selecting the right gear parameters to determine tion. Infomax is a tool for cruising speed than inboard acceleration. Delivers fuel the Group presents the changes, throttle and safer and more comfortable. With dual clutches, gear bus network in . off the production line this for the job and the current the best shift option. measuring and analyzing shafts. savings of up to 35 %. world’s first CO2-neutral ve- brakes on gradients very Made famous by the “epic changes take place without Benefits include low noise, year, and the first truck a operating conditions. fuel consumption. hicle plant: the Volvo Trucks efficiently. split” ads. any interruption in power no local emissions, 99 %

year later. plant in Ghent, Belgium. delivery. reduction in CO2 emissions and 80 % energy savings.

EARLY PIONEERS Our commitment helped to save over 100 million lives and the pace of product innovation to quality and safety is rooted in to date. and successful commercialization OUR HISTORY the visionary approach of our found- accelerated. ing fathers, and ENVIRONMENTAL CARE AND TRANS- : PORT SOLUTIONS Already in early In addition, we were the first auto- “An automobile carries and is driven 70’s we acknowledged that our pro- motive manufacturer approved to OF TRAILBLAZING by people. The basic principle of all ducts had a negative environmental participate in WWF’s Climate Savers engineering is and must therefore be impact and we were determined to program; we launched the world’s safety. If a ball joint snaps, it can be do something about it. first carbon-neutral automotive pro- INNOVATION a matter of life and death.” duction plant; and we have worked By 1976, we had introduced the 3-way with world-leading partners on vari- In those days, this approach made us catalytic converter as an effective ous pioneering programs. unique. Within a few years, our com- system for reducing exhaust emis- “The Volvo Group builds on 90 years of corporate history pany was producing best-selling trucks sions. In the 1990s, we launched the Going forward, connectivity between and outboard engines and the first bus Environmental Concept Car, Bus vehicles and traffic systems is a major defined by values-led innovation.” was launched in 1934. and Truck and the Group’s first fleet focus. There are already more than management solution. 400,000 vehicles on the road today In 1959, Volvo pioneered the 3-point that are wirelessly connected, and safety belt and felt so strongly about FAST FORWARD After the divestment improving profitability for our cus- its importance, we chose not to patent of in 1999 we focused tomers and for the Volvo Group. the design. By sharing it, we have exclusively on commercial vehicles

4 5 WHERE THE VOLVO GROUP’S 100,000 EMPLOYEES AND MAKING A 66 PRODUCTION SITES ARE LOCATED

Europe DIFFERENCE 55%

North America Asia ON A GLOBAL SCALE 16% 19%

With 100,000 employees worldwide, production facilities in 18 countries, a presence in 190 markets and sales close South to 300,000 units per year, the Volvo Group uses its global America scale to meet customer needs locally. 7%

Other markets 3%

RESPECTED LEADERSHIP The Volvo industry-leading brands. Different • To be amongst the most profitable Group is one of the world’s leading brands enable us to meet the individ- in our industry and our customers’ JOINT VENTURES & closest business partner. manufacturers of trucks, buses, con- ual needs of diverse customers across VOLVO GROUP PRODUCTION SITES BRANDS STRATEGIC ALLIANCES: • To be a contributor to societal devel- struction equipment, marine and all markets and segments worldwide. opment locally and globally. Eicher* Construction equipment Volvo Sunwing industrial engines. We also provide • To be an employer of choice with Volvo Penta SDGL complete solutions for financing SHARED AMBITIONS Across all Mack Buses a global team of high-performing UD Eicher and service. operations and countries, we share people and diverse leaders. Renault Trucks Volvo Penta Terex Trucks Donfeng Trucks common ambitions: • To be recognized as the leading UD Trucks * Ownership ≥ 50% Renault Trucks Through direct ownership, licensing • To be a proven innovator of energy- supplier of transport solutions. Volvo Prevost agreements and joint ventures, we efficient transport and infrastructure • To have zero accidents involving have built a strong portfolio of iconic, solutions. Volvo Group products. Engines and transmissions Mack

6 7 OUR VISION FOR THE FUTURE

The Volvo Group’s vision is to be the most desired and successful transport solution provider in the world.

FROM THE GROUND UP Our corpo- do business with us account, the Volvo Group will create rate social responsibility (CSR) and • We create value to move our sustainable transport solutions and sustainability approach and model business forward achieve our vision of becoming the support our business vision and strat- • We share value to help move world leader. Sustainable transport egies by developing strength and society forward solutions come at the intersection of credibility from the ground up. • We realize our vision these three elements.

Our approach is based on the Volvo Group’s history, values, culture, busi- ness strategies and vision, as well as SUSTAINABLE internationally accepted norms of re- TRANSPORT sponsible business practice, including Rethinking the future the United Nations Global Compact, SHARED VALUE Moving society and our business forward which we signed in 2001. RESPONSIBLE BEHAVIOR Increasing trust, growing stronger SOLID FOUNDATIONS Our approach is visualized as a pyramid, symboliz- ing the steps that take us onwards We have a clear vision of the road ahead, and upwards: SUSTAINABLE TRANSPORT SOLU- a strategic roadmap to get us there, • Ethical and responsible behaviour TIONS For us, sustainability has three and CSR and sustainability are integrated create trust dimensions – economic, environmen- into our daily work. • Trust encourages more people to tal and social. By taking all three into

9 WE ACTIVELY EARN TRUST – IT ISN’T GIVEN

We aim to increase trust and gain long-term corporate strength by conducting business in compliance with laws and regulations, managing risks and demonstrating business ethics and integrity, throughout the value chain.

CORPORATE TRUSTWORTHINESS These are driven by focus on our Environmental Product Information Actively integrating CSR and sustain- customers’ success and that each based on lifecycle analysis. ability into our policies and practises new product should have less helps us minimize risk, protect our environmental impact to make it To increase customers’ uptime and reputation, and attract high-per- better than the one it replaces. productivity, we invest significantly forming talent. in aftersales support and servicing. Purchasing We expect key suppliers Every employee is responsible for fol- of automotive parts to be certified by Products in use More than 90 % of lowing the principles of our Code of a third-party environmental manage- our products’ environmental im- Conduct, which details the Group’s ment system and all our suppliers to pacts arise during the ‘in use’ phase. minimum requirements on business comply with our CSR requirements. In response, we strive to offer prod- ethics, human rights, social justice, ucts that are more energy efficient, and environmental responsibility. Production 98 % of our production run on alternative fuels, and incor- centers worldwide has achieved porate technological solutions. We VALUE CHAIN SUSTAINABILITY quality and environmental manage- also support the development of What we produce and how we ment certification; three have reached fuel-efficient driving and operating pro­duce it are at the core of our the highest international energy skills. sustainability commitment. We take standard; and four are carbon neutral. responsibility for our own operations, Re-use Around 85% of a Volvo and aim to drive responsible business This supports our aim of minimizing truck can be recycled or remanufac- behavior through our supply chain, our environmental impacts in terms tured, dramatically saving the energy THE VOLVO GROUP VALUE CHAIN distribution and service networks, of energy, emissions, chemicals, needed for creating new components

customer base and commercial part- waste, water, transport and logistics. and cutting CO2 emissions. The nerships. Volvo Group has eight remanufac- Distribution and service Nine out of turing centres worldwide who work Product development Each stage of our ten of our distribution centres have closely with product developers to product development cycle has differ- achieved quality and environmental ensure they can recover as much ent quality, safety and environmental certification. To help our customers material as possible. objectives. make informed purchases, we share

10 11 OUR ROUTE TO SHARED VALUE

Improving customer satisfaction, delivering a strong financial performance, creating a skilled workforce, and promoting societal engagement are the Volvo Group’s main priorities for creating shared value.

We create economic value for our cient servicing, maintenance, repairs We focus on three areas with the company and shareholders by deliv- and assistance, we can get them highest potential for mutual benefit ering transport and infrastructure quickly back on the road. This is for our business and the society: solutions that meet the needs of our the thinking behind our dedicated • Traffic and worksite safety customers. We support our custom- Uptime Center, opened 2014, • Environmental sustainability ers’ value creation through efficient serving Volvo and in • Education and skills development. products and world-class services. the US and Canada. We remain competitive, sustainable The Volvo Group runs a wide range and profitable by investing in the DEVELOPING EXPERTISE Achieving of road and traffic safety campaigns Group’s employees. We move our our vision is dependent on having in many of the countries where we business and society forward by people with the right skills and operate, including Europe, Asia and aligning our CSR programs with our knowledge across all of our businesses. the Americas. business needs. We allocate around half a million training days a year to our employees We highlight and discuss the issue of FINANCIAL PERFORMANCE Increasing and retail organization worldwide. climate change at diverse stakeholder profitability and delivering a strong In 2014, we opened the Volvo Group events, such as the Volvo Group financial performance is a strategic University as our global centre for Sustainability Forum and the Volvo priority. It enables us to invest in excellence. Ocean Race. new products, services and the development of our people, and to MOVING SOCIETY FORWARD In 2015, To address the shortage of skills in contribute to society. we launched our renewed program key future markets, we are partnering for societal engagement called Moving with various development agencies CUSTOMER SATISFACTION To sup- Society Forward. It aims to enhance – to establish vocational training for port our customers’ profitability, we our competitive advantage and profit- 4,500 mechanics in 10 African On land and at sea, our fuel-efficient focus on high product quality, safety, ability while simultaneously advancing countries over the next five years. products and innovative technology reliability and fuel efficiency. But social, economic and environmental We have already opened schools in help to move our customers’ busi- when a truck goes down, so does a conditions in the communities where Ethiopia and are working on plans nesses forward – safely and profitably. customer’s business. Through effi- we operate and sell. for Morocco and Zambia.

13 SUSTAINABLE TRANSPORT SOLUTIONS LEADERSHIP

Our history of pioneering innovation, responsible approach to business, and success at creating value put the Volvo Group in an excellent position to rethink future transport and become the world leader in sustainable transport solutions.

TAKING THE LEAD The Volvo Group port solution provider in the world, hometown, is now home to the pio- Route 55 is part of ElectriCity – a co- Bus Euro 6 engines used in city and SMART TRANSPORT Telematics and invests significant resources in lead- we have prioritized our work in neering Route 55 – a bus route operative venture between academia, intercity buses were certified to run connected services are changing the ing-edge research and innovation – three key areas: serviced exclusively by electric and industrial and local governmental on HVO – a renewable fuel and way the Volvo Group can enhance both in-house and in partnership • Energy efficiency and low emissions electric hybrid buses. partners to develop, demonstrate and alternative to regular diesel. existing services and deliver sustain- with stakeholders. We partner with • Product and traffic safety are quickly charged with renewable evaluate the next generation of public able solutions to support customers leading public and private sector • Technologically smart transport energy at each end of the route. transport. SAFER SOLUTIONS Our goal is for and maximize safety, economic and stakeholders and collaborate with solutions zero accidents involving the Group’s eco-efficiency. globally respected organizations to Our fully electric buses are designed ALTERNATIVE FUELS The Volvo products. As studies show that more push ourselves, our sector, and socie- ENERGY SAVING For the average car for sustainable city transport: Group believes the use of alternative than 90 % of accidents are down to Trucks that save fuel by remember- ty in a more sustainable direction. driver, fuel savings up to 3 % may • Silent and renewable fuels is one way of human factors, assisting drivers with ing a stretch of road, and hybrid not sound a lot. But for the owner • No exhaust emissions reducing fossil fuel dependency and technology and training are our buses that automatically switch to We co-chair the United Nations of a commercial fleet where fuel is • 80 % energy savings climate impact. Securing of supply is priorities. electric power in emissions-free (UN) High-level Advisory Group on a major cost, it can mean the differ- crucial for long-term environmental, zones, are already on the road. Sustainable Transport. We play an ence between profit and loss. social and economic sustainability. Driver Alert Support, Lane Changing active role in numerous local, regional Support and Collision Warning with We are trialling technology that and cross-border governmental The engine in our Volvo trucks in In Europe, for example, 600 gas pow- Emergency Brake System are pioneer- allows a lead truck to communicate initiatives to assess the viability of North America is already delivering ered Renault Trucks are used for city ing truck safety features. The technol- with and drive a platoon behind it. sustainable transport systems. And fuel-saving benefits for our custom- distribution and refuse collection. ogy is also being adapted for our buses. And we are developing construction we work closely with policy makers ers. Aerodynamic sculpting and Volvo Trucks has expanded its range equipment driven autonomously by to ensure infrastructure supports adaptive software developed for the to include the Volvo CNG model, To complement our technological robots. To name but a few. our innovative solutions. 2016 series could enhance this by which runs entirely on methane gas solutions, we run driver training and up to 3.5 % and 2.5 % respectively. (Compressed Natural Gas). When operator programs around the world,

KEY PRIORITIES To become the using biogas, it reduces CO2 emis- raising awareness and teaching safe Be part of the future. Come on board most desired and successful trans- ROUTE 55 Gothenburg, our Group’s sions by up to 70 %. Recently, Volvo and fuel-efficient techniques. and join us …

14 15 The Volvo Group never stops moving forward.

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