After almost four years at the helm of truck maker Volvo and with time running out on showing the boon from cost cuts, chief executive Olof Persson may soon be heading for the exit, Swedish business daily Dagens Industri reported.
Volvo Trucks is a completely different company from Volvo Cars, which is owned by the Chinese company Geely.
Volvo Trucks has been locked in battle with Daimler and Volkswagen’s truck brands for market leadership and has, over the past year, suffered a deep downturn for its construction gear in a plunging Chinese market.
Dagens Industri, quoting unnamed sources, reported that an announcement about the CEO’s departure could come within one or two weeks, and that one likely successor could be Martin Lundstedt, head of Volkswagen’s truck-making unit Scania.
Spokesmen for Volvo and its board chairman, Carl-Henric Svanberg, declined to comment on the report.
Volvo, Sweden’s biggest company by sales and top private sector employer, has been on an efficiency drive aimed at boosting its profit margin by 3 percentage points by the end of 2015. The truck maker posted an operating margin of 8.7 per cent in the final year before the efficiency scheme was launched. Its margin in 2014 ended at 2.1 per cent.
Activist fund Cevian, the second biggest owner of the firm by votes, had called for it to end 2014 with a double digit margin.
Persson, who headed Volvo’s former Aero and construction gear arms before becoming CEO, said in February the efficiency drive aimed at saving 10 billion crowns ($US1.15 billion) was going “according to plan”.
Handelsbanken Capital Markets analyst Hampus Engellau said the market had expected a gradual improvement of results, something which still seemed out of sight. But he added Persson still had some time before the deadline.
“Although it could be that they have come to the point of realising this is not going to work,” Engellau said.
Volvo shares rose 2 per cent at 1208 GMT, while the broader Stockholm share index was up 0.3 per cent.
Since Persson took the helm in September 2011, Volvo shares are up a little over 30 per cent compared with a close to 90 per cent gain in the STOXX Europe 600 Industrial Goods & Services Index and a more than 170 per cent rise for German rival Daimler.
($US1 = 8.6614 Swedish crowns)
(Reporting by Helena Soderpalm; additional reporting by Anna Ringstrom and Rebecka Roos; Editing by Elaine Hardcastle)
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