Volvo has been constantly on the news, mostly catering to the trucks needed in the various sectors of business the past days. Now it announces new proprietary medium-heavy engines slated to come out this 2010. With the weakened demand for trucks, the need to cut cost in getting engines from suppliers is evident. Hence, with an in-house production, the issue of inventory storage cost can be addressed as well as deteriorating quality for trucks distribution.
In his presentation, Mikael Bratt, CFO of the Volvo Group, described the measures being implemented throughout the Group to reduce cost levels and improve cash flow. He also said that the Volvo Group has high liquidity reserves despite the sharp economic downturn, and that the company has an advantageous loan structure with few loans maturing in the next two years. Furthermore, with its global presence, the Group has excellent opportunities for raising loans on the capital market.
This measure is seen as something similar to the cost-cutting measures that most auto companies are undertaking these days. And with Volvo being a reliable brand and yet getting the cheap end of demands, wiser management strategies need to be implemented as well.
(Source) Press
Tags: auto companies, cash flow, economic downturn, global presence, inventory storage, liquidity, loan structure, Loans, management strategies, measures, sectors of business, trucks, Volvo, volvo group
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[...] Volvo has received a new order for 125 trucks from Vijay Leasing Company in Hydreabad, India, to be delivered this summer which will be used in coal and steel mines for Southern India. At the moment, Vijay Leasing Co. already has 108 Volvo trucks under its fleet. [...]