Volvo Rents becomes subsidiary of AB Volvo
15 April 2011
Volvo is moving its North American Volvo Rents business from the Volvo Construction Equipment division to become a subsidiary of AB Volvo.
Volvo said the move would give it independence from Volvo CE at a time when the North America rental sector is showing signs of recovery and with the rental operation taking an "increasingly important role in securing sales in the upturn".
As part of the change, Scott Hall, currently Volvo CE's executive vice president and head of global sales and marketing, becomes the new president and chief executive officer of Volvo Rents, effective on 1 May, and will relocate to Volvo Rents' new headquarters in Shippensburg, Pennsylvania.
Current Volvo Rents president Barry Natwick will take up the new position of chief operating officer of Volvo Rents, reporting to Mr Hall.
As previously reported, Volvo said it will provide investment capital for its franchise holders in North America and would also be prepared to acquire franchises and operate Volvo-owned rental stores if necessary.
Volvo also has Volvo Rents operations in Europe, the Middle East and Asia, but the implications for these businesses - and whether Volvo may have to buy some of the franchises - are not yet fully clear.
IRN contacted Volvo CE for a fuller explanation of the changes, but the company said it wanted to limit its comments to its press release. One question still to be fully answered is why the Volvo Rents business - which rents construction equipment - will fit better outside the Volvo Construction Equipment business.
It may be that formal separation for the manufacturing business will allow Volvo Rents to develop a strategy that's serves its own interests rather than those of the sales division. In that sense, the change could reflect an increased focus on developing the rental business, although that remains to be seen.
Meanwhile, Olof Persson, president and chief executive officer of Volvo CE, welcomed Mr Hall's appointment; "Scott Hall has done an extraordinarily good job as head of global sales & marketing and I am very pleased that he has accepted this new challenge.
"I am convinced he, together with Barry Natwick and the rest of the team, has the capabilities to grow Volvo Rents to a sizeable business."
Mr Hall will report to the chairman of the Volvo Rents board, Mikael Bratt, chief financial officer of AB Volvo.
Replacing Scott Hall in the global sales position at Volvo CE is Eberhard Wedekind, who was previously head of Volvo CE's Asia operations. He will relocate from Singapore to Brussels, Belgium.