Volvo Group and Volvo Cars are two separate companies that share a common history and branding. However, they have been completely independent from one another since 1999. Understanding the difference between the two can be confusing given their similar names and shared heritage.
Brief History
Volvo Group and Volvo Cars originated from the same company, AB Volvo, which was founded in Sweden in 1927 as a subsidiary of the ball bearing manufacturer SKF. AB Volvo began as a manufacturer of commercial vehicles and later expanded into passenger cars in the 1940s.
In 1999, AB Volvo split its operations into two independent companies:
- Volvo Group – Specializing in commercial vehicles, engines, construction equipment and more
- Volvo Cars – Focusing solely on passenger vehicles
This split allowed each company to focus on its core business and brands. Since the split, both companies have continued using the Volvo name and logo under license from AB Volvo.
Company Overviews
Volvo Group
Volvo Group is a Swedish multinational company headquartered in Gothenburg, Sweden. It is one of the world’s leading manufacturers of heavy-duty trucks, buses, construction equipment, marine and industrial engines. Volvo Group employs nearly 100,000 people worldwide.
Some of Volvo Group’s major brands and products include:
- Volvo Trucks
- Mack Trucks
- Renault Trucks
- UD Trucks
- Volvo Construction Equipment
- Volvo Buses
- Volvo Penta marine engines
In 2021, Volvo Group’s net sales were about $43 billion USD. The company’s largest markets are Europe and North America.
Volvo Cars
Volvo Cars is an international luxury vehicle maker founded in Sweden and headquartered in Gothenburg. It is focused solely on the design, engineering and manufacturing of premium passenger cars.
Some of Volvo Cars’ most popular models include:
- Volvo S60
- Volvo XC90
- Volvo XC60
- Volvo S90
- Volvo V60
In 2021, Volvo Cars sold over 690,000 cars globally and brought in revenue of about $24 billion USD. Its largest market is China, followed by the United States and Sweden.
Volvo Cars has been owned by the Chinese automotive company Geely since 2010 when it was purchased from Ford.
Key Differences
While Volvo Group and Volvo Cars share a historical connection, there are some significant differences between the two companies today:
Volvo Group | Volvo Cars |
---|---|
Focuses on commercial vehicles and equipment | Passenger vehicles only |
Owns brands like Mack Trucks, Renault Trucks, etc. | Single brand – Volvo |
Headquartered in Gothenburg, Sweden | Headquartered in Gothenburg, Sweden |
Publicly listed company traded on Nasdaq Stockholm | Privately owned subsidiary of Geely Holding |
CEO is Martin Lundstedt | CEO is Jim Rowan |
Over 95,000 employees worldwide | Over 40,000 employees worldwide |
2021 revenue ~$43 billion USD | 2021 revenue ~$24 billion USD |
In summary, while both companies share the Volvo name and Swedish roots, Volvo Group is significantly larger and more diversified while Volvo Cars focuses exclusively on consumer vehicles.
Ownership Structure
The ownership structures of Volvo Group and Volvo Cars are completely separate:
Volvo Group
Volvo Group is a publicly listed company traded on the Nasdaq Stockholm. Its shares are distributed as follows:
- Industrivärden: 6.8% of shares
- Norges Bank Investment Management: 6.8%
- AMF Insurance and Funds: 4.7%
- Alecta: 4.6%
- SHB Funds & Life Insurance: 3.8%
- Swedbank Robur Funds: 3.5%
- AFA Insurance: 2.1%
- Other shareholders: 67.7%
As a publicly listed company, Volvo Group’s shares are traded regularly on the open market.
Volvo Cars
Volvo Cars is wholly owned by Zhejiang Geely Holding Group, a Chinese automotive company. Geely purchased Volvo Cars from Ford in 2010 for $1.8 billion.
As a subsidiary, Volvo Cars’ shares are not publicly traded. Geely owns 100% of the company and controls all decision making.
Financial Performance
In recent years, both Volvo Group and Volvo Cars have been performing well financially:
Volvo Group (2016-2021)
Year | Revenue (USD billions) | Net Income (USD billions) |
---|---|---|
2016 | $33.5 | $1.5 |
2017 | $37.3 | $2.4 |
2018 | $43.0 | $2.6 |
2019 | $45.7 | $2.3 |
2020 | $38.6 | $1.6 |
2021 | $43.0 | $4.4 |
Volvo Group has maintained steady growth in revenue over the past five years. The pandemic in 2020 resulted in a dip in net income, but earnings rebounded strongly in 2021.
Volvo Cars (2016-2021)
Year | Revenue (USD billions) | Operating Income (USD billions) |
---|---|---|
2016 | $21.7 | $1.6 |
2017 | $25.0 | $1.8 |
2018 | $26.4 | $1.9 |
2019 | $27.2 | $1.8 |
2020 | $24.1 | $1.2 |
2021 | $24.5 | $1.7 |
Like Volvo Group, Volvo Cars has seen consistent revenue growth in recent years. The pandemic temporarily reduced profits in 2020, but the company rebounded well by 2021.
Branding Differences
Despite being independent firms, Volvo Group and Volvo Cars both utilize the Volvo name and iron mark logo under a shared licensing agreement:
- Volvo Cars uses the Volvo name and logo for all passenger vehicle brand and marketing purposes.
- Volvo Group uses the Volvo name and logo for its trucks, buses, construction equipment and engine products.
However, each company markets itself distinctly:
Volvo Group Branding
- Focuses branding on commercial vehicle leadership, quality and safety
- Target customers are B2B, fleet operators, public transportation providers
- Uses differentiation for sub-brands like Volvo Trucks, Volvo CE, Mack Trucks, etc.
- Slogan is “Driving Progress”
Volvo Cars Branding
- Focuses branding on Scandinavian design, innovation and environmental focus
- Target customers are individual consumers and retail buyers
- Single unified Volvo brand and identity
- Slogan is “For People Who Drive”
This separate branding allows each company to target their distinct customer bases without confusion despite both using the Volvo name.
Technology Differences
As automotive manufacturers, Volvo Group and Volvo Cars invest significantly in R&D and new technologies. However, their technology focuses differ:
Volvo Group Technology Focus
- Electrification of trucks, buses and equipment
- Autonomous transport solutions
- Alternative fuels and drivetrains
- Connected vehicle services
- Automation and driver assistance
- Fuel efficiency
Volvo Cars Technology Focus
- Electrification of passenger vehicles
- Self-driving and ADAS systems
- Connected car services
- Sustainable and recycled interiors
- Battery and charging innovations
- Hybrid powertrains
There is overlap in focus areas like electrification, autonomy and connectivity. However, the core technologies being developed are tailored to each company’s specific commercial and consumer needs respectively.
Manufacturing Differences
The manufacturing operations of Volvo Group and Volvo Cars are completely separate:
Volvo Group Manufacturing
- Over 40 production facilities globally
- Major truck plants in Sweden, Belgium and USA
- Bus plants in Europe and South America
- Engine plants in Europe and Asia
- Joint venture plants with local partners in China, India and Russia
Volvo Cars Manufacturing
- Vehicle production facilities in Sweden, Belgium, Malaysia, China and USA
- Engines built in Sweden and China
- Self-owned plants as well as joint ventures with Geely in China
Both companies have worked to globalize manufacturing in key markets. But Volvo Cars is more concentrated in Sweden, Belgium and China, while Volvo Group has highly diversified global production appropriate for commercial vehicles.
Conclusion
In summary, while Volvo Group and Volvo Cars share historical roots and the Volvo brand, they have evolved into distinct companies with major differences:
- Volvo Group is a much larger, diversified company focused on commercial vehicles and equipment.
- Volvo Cars is smaller, concentrating solely on consumer passenger cars.
- Volvo Group is publicly listed while Volvo Cars is owned by Geely.
- They operate independently in terms of finances, branding, technology and manufacturing.
However, the two companies do cooperate in areas like sharing technology and development costs. Both Volvo Group and Volvo Cars uphold the traditions of innovation, safety and environmental responsibility associated with the Volvo brand. Understanding their differences and synergies provides key insights into the Volvo world.