Volvo Purchasing Agreement

We are in the process of dividing our activities into suppliers of direct materials (supply of production materials for the manufacture of our products) and indirect purchasing suppliers (other products and services necessary to manage our activities). Given the size of the group`s vehicles and machines, and therefore the need for a localized purchase, I press the autonomy granted to the local purchasing company. It outlines the responsibilities of local teams. “The local purchasing team has a responsibility to ensure that we have the right level of location, for example to ensure that we comply with regional legislation, and more importantly, to ensure that we have short delivery times to meet the needs of our customers.” Our local teams must also push our suppliers into Volvo Group`s global system and develop the local supply base. However, final sourcing decisions are made centrally, as they will allow us to compare different situations in the world and find the right strategies in areas such as global investments with global suppliers. As a manufacturer of large machines, from trucks to earthmoving trolleys and other large off-highway vehicles, Volvo Group has had a sense of building close to its markets and, as such, Volvo Group has many production sites in different countries. This poses very different challenges for the purchasing team compared to many automakers, since the supply often has to be more local because of the size and mass of components thrifty components used in heavy vehicles. Fuder explains how responsibility for different regions is distributed: “In general, we have a business model for managing purchases via a line so called strategic and also through an operational line. The operational line is made up of full teams in different regions. In North America, for example, we have a purchasing manager who is fully responsible for procurement in that region, from A to Z. On the other hand, the strategic line ensures that here in Sweden, “the family remains centrally united.” Our mantra could be said: close to our customers and partners, in Mack in the USA, at UD in Japan, at Renault Truck in France and so on. This is the local philosophy we established last year and we are already seeing the impact in business.

Our employees are starting to think in terms of customer needs and profit and brand loss, which in turn is exactly what drives business in the right direction, but we are also very clear about what is in our strategic line – our overall strategic vision to maintain synergies within the Volvo Group. If you check a box in a digital acceptance process, confirm that you have read these specific terms of purchase of services (“Specific Conditions”) and accept that a binding agreement between you and Volvo Car Corporation, a Swedish company with registration number 556074-3089, with address 405 31 Gothenburg, Sweden, (“Volvo” or “us” has been concluded for the purchase of a service.

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