Scania boss replaces Volvo boss
Martin Lundstedt has left his position as President and CEO of Scania to take on the same role with Volvo Group. Martin is scheduled to assume this new position in October 2015. In the role, Martin replaces Olof Persson, who has led the Group for almost four years. In the interim, Jan Gurander, Volvo’s Group Chief Financial Officer, will be acting President and CEO.
Martin Lundstedt has spent his career at Scania. He joined in 1992 as a trainee after obtaining an MSc in Industrial Management and Technology. He has held a number of executive positions and has been the President and CEO there since 2012.
Chairman of the Board of AB Volvo, Carl-Henric Svanberg, said, ‘After three years of focus on product renewal, internal efficiency and restructuring, the Volvo Group is gradually entering a new phase with an intensified focus on growth and increased profitability. This will be achieved by further building on our leading brands, strong assets and engaged and skilled employees all over the world. Martin Lundstedt has 25 years of experience from development, production and sales within the commercial vehicle industry. He is also known for his winning leadership style.’
‘Olof Persson has with energy and determination carried out an extensive change of the Volvo Group. He has focused Volvo on commercial vehicles and sold unrelated businesses and assets to a value of over SEK20bn/£1.53bn. He introduced a functional organization and paved the way for cost savings of SEK10bn/£0.76bn. He also concluded the agreement with one of China’s largest truck manufacturers, Dongfeng, and led the company during the largest product renewal in the Group’s history. Today the Volvo Group is considerably better positioned to compete for leadership in our industry.’
Commenting on Martin Lunstedt’s departure, Chairman of the Scania Board of Directors, Prof. Dr. Martin Winterkorn, said, ‘We respect Martin Lundstedt’s decision to leave the company and wish to thank him for his successful efforts to further develop and strengthen Scania’s strong market position during his years as President and CEO.’
Per Hallberg, Scania’s Executive Vice President, Head of Production and Logistics, has been appointed the manufacturer’s acting President and CEO. He keeps his current management responsibilities as well as the new temporary role. Per Hallberg has a Master of Science in Industrial Engineering and Economics and joined Scania in 1977. He has been a member of the company’s executive management since 2001.
Automotive market forecasting company, IHS Automotive, highlighted that Olof Persson’s replacement comes at the same time as Volvo announced improved performance in the first quarter of this year.
For the three months ending 31 March, the company revealed it had seen an increase in its net sales of 13.9% year on year to SEK74,788m/£5,718.05m. However, it added that had this been adjusted to reflect acquired and divested units during this quarter, as well as currency movements, sales have only increased by around 1%. Operating income excluding restructuring charges for the quarter have almost quadrupled from SEK2,588m/£197.87m to SEK7,066m/£540.24m. Its Buses business recorded an even more significant improvement than the truck division, with a gain in sales revenues of 41% year on year to SEK4,748m/£363.02m. Its operating earnings almost trebled from SEK36m/£2.75m to SEK104m/£7.95m. The improvement is despite a fall in deliveries of its consolidated operations of 10.8% year on year to 1,584.
A statement from HIS Automotive, said, ‘While Svanberg has given some credit to Persson’s efforts during his around four years in charge of Volvo Group, and his three year efficiency and restructuring drive in his statement, progress has not been swift enough to ensure his survival leading the company. Indeed, he had originally said the target would include a reduction in costs of around SEK10bn while at the same time as an improvement in profitability. However, with the deadline for delivering these targets running down and margins still behind that expected, directors and shareholders have clearly been looking elsewhere for a new leader.’
‘While the announcement of Lundstedt is something of a surprise, there is a great deal of rationale for doing so. He has risen swiftly during his career to end up leading Scania, which is renowned for its profit margins. Christer Gardell, managing partner at Cevian, Volvo’s second-biggest stakeholder by votes, has told Reuters that he is “widely recognised as one of the best leaders in the trucking world”. The question is now whether he can improve Volvo’s fortunes in a similar fashion. It also raises the question as to how the Volkswagen (VW) Group and its new head of its commercial vehicle business Andreas Renschler will replace him.’