Stockholm, Sweden — Heavy truck maker Volvo AB is both reducing the number of its suppliers and asking the remainder to cut prices by 6 per cent this year.
The move by Volvo AB, the parent of Volvo Trucks North America, is part of its consolidation of Renault SA’s truck unit. Volvo is in the process of integrating its truck operations with Renault’s RVI Mack unit. It acquired the unit in January.
Volvo has about 800 suppliers worldwide, and is looking to lower redundancies.
“Those suppliers who remain will get larger contracts. By increasing his volume, he can reduce his price by 6 percent,” says Adi Nilson, a spokeswoman for Volvo.
Volvo reportedly has between three to six suppliers for each component, now that it owns Mack.
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