Volvo sells axle plant to Mentor • Volvo has sold
Page 20
If you've noticed an error in this article please click here to report it so we can fix it.
its driveaxle factory at Lindesberg in Sweden to Mentor, formerly ROR Rockwell, in a move that signals the end of the Swedish manufacturer's existence as a fully integrated truck manufacturer.
Volvo has already chosen Cummins as an engine supplier for its heavy trucks in the US, and is now offering a Cummins-Eaton enginegearbox combination in Australia (CM11-17 June).
The disposal of the Lindesberg plant will raise money for Volvo—it is not saying how much—but part of the agreement is that Mentor will become Volvo Trucks' primary supplier of rear axles throughout the world.
The plant is currently building around 70,000 axles per year.
This is a major change in philosophy for Volvo. "In recent years Volvo has moved away from being a product-led manufacturer to being a market-led supplier," said Volvo business manager Steve Kirk at the recent launch of the Mitsubishi-built Canter light truck, which is now being sold through Volvo's UK dealer network.
Truck manufacturers are increasingly looking at buying-in major components as the costs of development and compliance with legislation become ever higher.
Alternative approaches include economies of scale (as demonstrated by Mercedes-Benz and Paccar) or modular production, as practised by Scania. The value of a marque's brand image, and the financing and dealer support it can give, have become almost as important as the products themselves.