Volvo Group has discontinued the process to divest itself of its worldwide Governmental Sales business (VGGS).
Group deputy CEO/CFO Jan Gurander said that despite the operation's positive development and strong order book, the offers it had received did not reflect its value.
“We have therefore decided to discontinue the divestment process.”
Governmental sales account for approximately1.5 per cent of the group’s total sales. The business, which has about 1,300 employees, most of whom are in France, but also in Australia and elsewhere, manufactures and sells specially designed vehicles to governments, the defence industry, peacekeeping forces and aid organisations.
VGGS Oceania is headquartered at Richlands, Queensland and Volvo Group's Truck Production facility at Wacol, which opened in 1972, is the largest assembly plant for heavy-duty trucks in Australia. VGGS Oceania was actually set up then as a subsidiary of Mack Defense Australia, and has been providing defence, security and emergency services in the Oceania region with vehicles through its Volvo, ACMAT, Panhard, Mack and Renault-Trucks Defence brands. VGGS Oceania has a workshop providing maintenance services for Mack trucks in service with Army; these are gradually being replaced by the new Rheinmetall vehicles being delivered under Project Land 121 Phase 3B.
In 1978 Mack Model RM6866RS heavy truck prototypes were produced for the Australian Army in several variants including cargo, dump truck, tanker, tractor and wrecker. An order was placed in 1981 for a total of 906 vehicles. Deliveries to the Australian Army commenced in 1982 and were completed by 1986.
At this stage the exact look of the final structural reorganisation of VGGS Oceania is unclear but ADM understands that it is likely that at least some of the existing outfit will be absorbed into Volvo Group Australia.