VOLVO 3P PURCHASING Lars Himmer & Thomas Motus

Vision

To be valued as the worlds leading provider of commercial transport solutions.

Wanted positions in each of our businesses:

Number 1 in image and customer satisfaction Sustainable profitability above average Number 1 or 2 in size or superior growth rate

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Corporate Values

Quality Safety Environment

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Global positions
Trucks Marine engines

2
Buses

in Europe

2
Heavy duty diesel engines

2
Construction Equipment

1
Aerospace components

3
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Leading independent provider

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Kaluga Plant

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Volvo Trucks no 1 in Russia

1st foreign truck registered in Russia: 1973 1st in geographical coverage of sales and service in Russia: 39 1st in imported brand for 11 consecutive years in Russia 1st in population of foreign trucks in Russia: +50.000 1st in leasing portfolio for commercial vehicles 1st in complete transport solutions 1st in CKD manufacturing of foreign trucks in Russia: 2003 1st in automotive factory construction time 1st in large-scale CBU manufacturing of foreign trucks in Russia

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Kaluga Production Capacity

Volvo Truck 10 000 Trucks

Renault Trucks

5 000 Trucks

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Products Volvo Trucks FH FM FE/FL

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Products Renault Trucks Premium Kreax

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Examples of current suppliers

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From CKD to CBU

In the spring of 2009 we went from CKD to CBU production in Kaluga, today production is similar in processes to our other European factories in Gothenburg, Ghent, Burge-enBresse and Blainville

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Organisation
AB Volvo
Business Areas

Mack Trucks

Renault Trucks

Volvo Trucks

Nissan Diesel

Buses

Construction Equipment

Volvo Penta

Volvo Aero

Financial Services

Business Units Volvo 3P Volvo Powertrain Volvo Parts Volvo Logistics Volvo Information Technology & Others

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Volvo 3P
A Business Unit within the Volvo Group

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Volvo 3P Mission
"To propose and develop profitable products to ensure a strong competitive offer for each truck company based on common vehicle architecture and shared technology"

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Volvo 3P Purchasing
SPEND PEOPLE

VEHICLE DYNAMIC

CAB

34%
ELECTRICAL

3%CHASSIS

Total = 5600 M
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Total : 591 people

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Global and Regional Strengths

Production - Heavy Duty/Medium Duty Trucks

Europe North America Japan

India

South America Australia

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Purchasing strategy

Strongly support the Trucks Brands' growth objectives

Focus on supplier performance More Business with less suppliers Build strong relationships with world class suppliers Drive Efficiency to Operational Excellence

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Mission

Provide a competitive advantage to the Brands by selecting, developing, and managing premium suppliers to deliver at the best possible QDCF values to our customers.

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Sourcing Strategy - Russia

Focus on few = Big Business scope Strategic suppliers Develop business together Long term business relationship

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Global Sourcing Process

1
1 2

2
3 4 5

3
6 7

4
8

Segment Strategy

PSL

Supplier choice

Validation by Decision Fora

RFI

Data SSEM

Supplier List

RFQ

SEM

Nego

Supplier Choice

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Sourcing strategy approach

Step 3 Investigate export opportunities

Step 2 Focus on raw material cost, global impact + Russian access

Step 1 Focus on logistic cost opportunity

Time

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What components are we targeting for local sourcing

Step 1 Step 2 ctn Frame rails Cables Batteries Brackets Leaf Springs X members Complete Wheels Electrical Parts Fuel tanks Steering Gear Air tanks V-stays, rods Muffler Windshield Bunks Step 2 ctn Seats Mirrors Air Deflectors Plastic parts Radio/CD Mats, Panels Paint shops Small Parts Other

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Timeplan Supplier Selection

* Selected Suppliers

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Head of Purchasing Volvo 3P B. Blin

Organisation

Management Coordination JP.Kretz

Human Resources F.De Surrel Assistant MC.Duval

Cab P.Lundblad

Electrical B. Morin

Chassis N.Hamnstedt

Vehicle Dynamics J. Marchner

Supplier Quality Departmt. P.Lepromt

Global Purchasing Devlpt JM.Lanne

Finance & Business Control L.Lugo

Europe J. Klingberg

Lyon E.Chapoulaud Gothenburg J.Klingberg Allentown J.Alfier Greensboro P.Besson

North America P. Besson

Australia P.Besson

South America V. Bareto Ageo H.Rieck International D.Mackinovski Bangalore R.Colaco Shanghai S.Di Bartolomeo Turkey & Russia P.Mrtensson

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Volvo 3P

Contact details to Thomas Motus, Project Buyer Russia +46 31 3221884 thomas.moteus@volvo.com www.volvo.com/suppliers Address: Volvo 3P International Purchasing, Dept. 28051, AB4N 405 08 Gothenburg, Sweden

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Thank You ! !