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IHS Automotive - SAE International · IHS Automotive SupplierBusiness Supplying Volvo 2014 edition supplierbusiness.com Supplying the OEMs

Mar 26, 2020

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Page 1: IHS Automotive - SAE International · IHS Automotive SupplierBusiness Supplying Volvo 2014 edition supplierbusiness.com Supplying the OEMs

IHS Automotive

SupplierBusiness

SupplyingVolvo2014 edition supplierbusiness.com

Supplying the OEMs

Page 2: IHS Automotive - SAE International · IHS Automotive SupplierBusiness Supplying Volvo 2014 edition supplierbusiness.com Supplying the OEMs

2014 edition 2 © 2014 IHS

IHS Automotive SupplierBusiness | Supplying Volvo

COPYRIGHT NOTICE AND LEGAL DISCLAIMER© 2014 IHS. No portion of this report may be reproduced, reused, or otherwise distributed in any form without prior written consent, with the exception of any internal client distribution as may be permitted in the license agreement between client and IHS. Content reproduced or redistributed with IHS permission must display IHS legal notices and attributions of authorship. The information contained herein is from sources considered reliable but its accuracy and completeness are not warranted, nor are the opinions and analyses which are based upon it, and to the extent permitted by law, IHS shall not be liable for any errors or omissions or any loss, damage or expense incurred by reliance on information or any statement contained herein. For more information, please contact IHS at [email protected], +1 800 IHS CARE (from North American locations), or +44 (0) 1344 328 300 (from outside North America). All products, company names or other marks appearing in this publication are the trademarks and property of IHS or their respective owners.

IHS AutomotiveSupplierBusiness

ContentsIntroduction .................................................................................................................................................................... 5Financial Overview.......................................................................................................................................................... 7

First-half 2013 summary ............................................................................................................................................. 7Product and platform strategy ...................................................................................................................................... 9

Introduction .................................................................................................................................................................. 9Current major model programmes .......................................................................................................................... 11

V40 .............................................................................................................................................................................11S60/V60/XC60 ............................................................................................................................................................11V70/XC70 ................................................................................................................................................................... 12S80 ............................................................................................................................................................................ 12XC90 .......................................................................................................................................................................... 13

Future platforms and model programmes ............................................................................................................. 14SPA ............................................................................................................................................................................ 14CMA ........................................................................................................................................................................... 16

Powertrain strategy ................................................................................................................................................... 16New 4-cylinder engines ...............................................................................................................................................17

Purchasing strategy .................................................................................................................................................... 20Overview ..................................................................................................................................................................... 20

Interview ........................................................................................................................................................................ 22Lars Wrebo, Senior Vice President of Purchasing and Manufacturing at Volvo ................................................ 22

Introduction and evolution of the purchasing function at Volvo .................................................................................. 22The role and significance of Geely .............................................................................................................................. 22Implications for suppliers ............................................................................................................................................ 23The significance of the new platforms ....................................................................................................................... 23Size and scale of purchasing function … .................................................................................................................... 25Developments in China .............................................................................................................................................. 25Sourcing in Sweden ................................................................................................................................................... 26Government support .................................................................................................................................................. 27Supplier assessment .................................................................................................................................................. 27Supplier finance ......................................................................................................................................................... 27Directed sourcing, managing tier two suppliers .......................................................................................................... 28Supply chain security ................................................................................................................................................. 29Logistics ..................................................................................................................................................................... 29Implications of the new platforms for manufacturing ................................................................................................... 30Expanding existing manufacturing operations ............................................................................................................ 30Reasons for S60 being made in two places … ........................................................................................................... 31

Supplier interview: David Grice, Johnson Controls Sweden AB ......................................................................... 32Production strategy and manufacturing footprint ................................................................................................... 34

Introduction ................................................................................................................................................................ 34A growing manufacturing network .............................................................................................................................. 34

Sweden........................................................................................................................................................................ 34Gothenburg – Torslanda ............................................................................................................................................. 34Uddevalla ................................................................................................................................................................... 37

Page 3: IHS Automotive - SAE International · IHS Automotive SupplierBusiness Supplying Volvo 2014 edition supplierbusiness.com Supplying the OEMs

2014 edition 3 © 2014 IHS

IHS Automotive SupplierBusiness | Supplying Volvo

Skovde engine plant ................................................................................................................................................... 37Floby component plant .............................................................................................................................................. 38

Belgium ....................................................................................................................................................................... 38Ghent ......................................................................................................................................................................... 38

China ........................................................................................................................................................................... 40Major new investment ................................................................................................................................................ 40Chengdu supplier network ........................................................................................................................................ 42Environmental compliance ......................................................................................................................................... 43Joint model development with Geely .......................................................................................................................... 43

Technology .................................................................................................................................................................... 45Introduction ................................................................................................................................................................ 45

Vehicle connectivity .................................................................................................................................................. 45Extending pedestrian detection technology to cyclist detection .................................................................................. 45Night driving improved through innovative high-beam systems .................................................................................. 45

Self-driving, autonomous cars ................................................................................................................................. 45New battery concept: energy storage within body panels .......................................................................................... 46

Forward model program .............................................................................................................................................. 47OEM-Supplier survey results ...................................................................................................................................... 48

Introduction to the SuRe Index ................................................................................................................................ 48Methodology .............................................................................................................................................................. 48Executive summary ................................................................................................................................................... 48Profit potential ........................................................................................................................................................... 50

OEM level ................................................................................................................................................................... 51Organization ............................................................................................................................................................... 51

OEM level ................................................................................................................................................................... 52Trust ............................................................................................................................................................................. 52

OEM level ................................................................................................................................................................... 53Pursuit of excellence ................................................................................................................................................. 53

OEM level ................................................................................................................................................................... 54Outlook ........................................................................................................................................................................ 54

OEM level ................................................................................................................................................................... 55

FiguresFigure 1: Volvo Concept XC Coupé ............................................................................................................................. 10Figure 2: Volvo Concept Coupé ................................................................................................................................... 10Figure 3: Volvo V40 ........................................................................................................................................................ 11Figure 4: Volvo S60 ....................................................................................................................................................... 11Figure 5: Volvo V70 ........................................................................................................................................................ 12Figure 6: Volvo S80 ....................................................................................................................................................... 12Figure 7: Volvo XC90 ..................................................................................................................................................... 13Figure 8: Volvo XC90 Safety Cage ............................................................................................................................... 15Figure 9: Volvo Drive-E diesel engine ......................................................................................................................... 17Figure 10: Volvo Drive-E petrol engine ....................................................................................................................... 18Figure 11: Geographic split of Volvo purchasing (2012) .......................................................................................... 20Figure 12: Volvo’s Skovde engine plant ...................................................................................................................... 37Figure 13: Production at Volvo’s Ghent plant ............................................................................................................ 38Figure 14: Production at Volvo’s Chengdu plant ....................................................................................................... 41Figure 15: Teams at Volvo’s Chengdu plant ............................................................................................................... 42Figure 16: Volvo forward model program 2013–2021 ............................................................................................... 47Figure 17: SuRe Index 2013 - Top of the Ranking ...................................................................................................... 49Figure 18: SuRe Index 2013 - Middle of the Ranking ................................................................................................ 49Figure 19: 2012–2013 Profit potential results on scale ............................................................................................. 50

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2014 edition 4 © 2014 IHS

IHS Automotive SupplierBusiness | Supplying Volvo

Figure 20: 2012–2013 Organisation results on scale ................................................................................................ 51Figure 21: 2012–2013 Trust results on scale .............................................................................................................. 52Figure 22: 2012–2013 Pursuit of excellence results on scale .................................................................................. 53Figure 23: 2012–2013 Outlook results on scale ......................................................................................................... 54

TablesTable 1: Volvo Cars: financial highlights first-half 2013 vs. first-half 2012 ............................................................... 7Table 2: Volvo Cars retail sales first-half 2013 vs. first-half 2012 .............................................................................. 7Table 3: Volvo 2012 sales by powertrain type .............................................................................................................. 7Table 4: Volvo sales forecast for 2013 and 2018 by nameplate ................................................................................. 8Table 5: Volvo model production forecast, including platform ............................................................................... 13Table 6: Sequenced suppliers at Volvo’s Ghent plant .............................................................................................. 39Table 7: Parts delivered DSV from a warehouse within the Ghent complex ......................................................... 39Table 8: Volvo production forecast by country and production plant 2010–2017 ................................................. 43