Volvo announced the return of Hakan Samuelsson as CEO, effective April 1st. The former top executive of the Chinese-owned Swedish carmaker, who led it to record sales and profits between 2012 and 2022, succeeds Jim Rowan, who will leave his position and the board of directors on March 31st.
Now 74, Hakan Samuelsson transformed Volvo in his 10 years in charge, notably by making bold decisions such as abandoning diesel before its competitors and limiting vehicle top speeds to 180 km/h. He also oversaw the opening of a factory in the U.S. in 2018 and Volvo's IPO in 2021.
Volvo affected by trade tensions
The change in leadership comes as the electric vehicle market slows down and trade tensions pick up speed. Volvo will be affected by the 25-percent tariffs set to be imposed by the U.S. on auto imports, since part of its production remains based in Europe.
In parallel, the European Union has increased tariffs on EVs manufactured in China, which affects the new Volvo EX30. To circumvent those barriers, Volvo plans to produce that model in its Ghent plant in Belgium starting this year.
An experienced boss to revive Volvo
Faced with these challenges, Volvo's board of directors decided that the company needed seasoned industrial leadership. Eric Li, chairman of Zhejiang Geely Holding, Volvo's main shareholder, said that Samuelsson possesses “a rare combination of industrial depth, strategic clarity, and proven leadership.”
During the executive’s previous term, Volvo broke sales records six times in eight years. In 2012, just after its acquisition from Ford by Geely, Volvo posted a revenue of $12.4 billion USD with a zero-percent operating margin. In 2021, under Samuelsson's leadership, those figures had climbed to $28.2 billion and a margin of 7.2 percent.
An unfinished electric transition
Arriving at Volvo in 2022 after heading Dyson, Jim Rowan revised down the brand's electric ambitions. Volvo notably abandoned its goal of becoming 100-percent electric by the end of the decade, preferring to maintain a hybrid range due to stuttering demand for fully electric vehicles.
Despite efforts to strengthen the digitization and connectivity of Volvo vehicles, Rowan's strategy was not enough to stem the 48-percent drop in the brand's share price in one year.
A major challenge for Samuelsson
The returning CEO declared that “the automotive industry is under pressure from all sides. I am honored to return at a pivotal moment for Volvo Cars.”
His return to the head of the company aims to stabilize Volvo in the face of geopolitical tensions, electrification challenges, and increased competition in the global market.