STOCKHOLM (Reuters) - Sweden’s Volvo (VOLVb.ST) said on Tuesday it would launch a group-wide efficiency program that it saw generating 4 billion crowns ($627 million) in annual savings with full effect by the end of 2015.
Volvo, which sells trucks under the Renault, Mack and UD Trucks brands as well as its own name, said it would book the bulk of restructuring costs, which it saw at around 5 billion crowns, in 2014.
“The program encompasses both reduction of white collar employees and consultants and efficiency enhancements in the global industrial system,” Volvo said in a statement.
An upturn in demand in Europe, Volvo’s biggest market, has led to order books growing in recent months after a protracted slump, while a U.S. recovery is on firmer ground after a rough patch around the turn of the year as public spending was cut.
An extensive product renewal is underway at Volvo with the group rolling out five new truck models. In August, its truck deliveries dropped four percent year-on-year, held back by the renewal. Shipments in Europe slipped 18 percent.<ID:L5N0HE0J5>
Volvo said the savings covered a large number of operations and areas, with a majority within the truck business area, and it would announce the actions continuously as they were implemented.
($1 = 6.3844 Swedish crowns)
Reporting by Anna Ringstrom, Editing by Alistair Scrutton