Volvo is setting up a new business area for autonomous transport as it ramps up its ambitions in the driverless vehicle realm.
With Volvo Autonomous Solutions, the Swedish automotive giant is committing to breaking out its financials specifically relating to self-driving trucks, a process that will start after the change is actioned on January 1, 2020. The company suggested that this level of profit-and-loss disclosure will help it accelerate its goals in the burgeoning driverless vehicle industry by offering greater transparency to shareholders.
“It is a logical next step for us to gather expertise and resources in a new business area with profit-and-loss responsibility to take autonomous transport solutions to the next level,” said Volvo president and CEO Martin Lundstedt.
However, this news should be juxtaposed against Volvo’s third-quarter financials, where it has just reported a 45% year-on-year (YoY) drop in truck orders compared to the same period last year. It’s clear Volvo wants to appease shareholders by demonstrating that it’s looking to — and preparing for — a big transition to an autonomous future. Volvo said it’s currently in the process of recruiting a new head to lead its Volvo Autonomous Solutions unit.
Automation in industry
While Volvo has been making moves in the self-driving car sphere, including partnering with Uber for its own driverless car trials, most of Volvo’s higher-profile efforts of late have been in bringing autonomous trucks to market. A few months back, the company announced a partnership with ferry and logistics giant DFDS, which plans to use Volvo Trucks’ Vera to transport goods between a logistics hub and a port in Sweden.
Last year, Volvo announced that its first commercial self-driving trucks would be used in mining to transport limestone from mines to a nearby port, and the company has also trialed its technology to help sugarcane farmers in Brazil improve their crop yield and to collect garbage in Sweden. Back in June, Volvo partnered with chip giant Nvidia to collaborate on autonomous trucks.
It’s still very much early days for autonomous vehicles, but there is a growing sense that the technology will gain steam through niche use cases in specific industries, using “predefined routes, in repetitive flows” as Volvo puts it. This is why Volvo has now committed to divulging its figures through Volvo Autonomous Solutions, which will be reported as part of its Volvo Trucks business.
“We have experienced a significant increase in inquiries [about autonomous transport] from customers,” Lundstedt said. “With the Volvo Group’s wide range of offerings and broad experience of different applications, we have a unique opportunity to offer solutions that meet their specific needs.”