Competition in the world heavy truck industry increased significantly during the 1990s. Volvo was one the top three heavy truck competitions in the world in 2000. In 1975, Volvo had been attempting to penetrate the U.S.S heavy truck market. Volvo acquired the bankrupt U.S. truck manufacturer White Motor Corporation in May 1981, and the heavy truck division of General Motors in 1988. In spite of these efforts, Volvo had never achieved more than a 12% market share. In 2000, Volvo management was considering what need to be done to make the North American business viable. Truck could be divided in three groups: light, medium and heavy trucks.
Manufacturing; Truck manufacturing bore a resemblance to producing automobiles, with assembly line methods and just-in-time deliveries of components. Assembly was a complex operation involving tens of thousands of parts. Engine the leading European truck manufactures were integrated into drive-train components. In The U.S. most manufacturers were assemblers and made their own cabs, using components from outside suppliers. There were differences in terms of the degree to which each company fit the “American Concept” Freighliner and Paccar operated only as assemblers. Ford and Navistar manufactured some drive-train components, while Marck produced about 95% of its own engines.
Volvo Truck Group; Volvo was founded in 1925 to produce cars, trucks were added in 1928. Over the years Volvo evolved into a diversified industrial group, with a wide range of products from cars, trucks, buses, to marine and jet engine. Under the leadership of GEO Peher Gyllenhammar Volvo diversified further and became a conglomerate during the 1980s, entering such disparate industries as financial services, processed food, matches and pharmaceuticals.
In the mid-1990s the conglomerate strategy was reserved and Volvo refocused on vehicles and heavy equipment. By 1998 sales had reached $27 billon. Cars had been the