The financial risk of launching the Swedish automobile brand Volvo originated from the personal savings and sales commissions of Assar Gabrielsson. A graduate of the Stockholm School of Economics, Gabrielsson transitioned from a career in bearing manufacturing to industrial entrepreneurship, eventually reshaping the automotive sector by securing the backing of SKF for a project that began as his own private venture.
Early Career at SKF
Born in 1891 in Korsberga, Gabrielsson entered the industrial sector during the early 1900s. He joined the bearing manufacturer SKF in 1916, working under Björn Prytz. By June 1922, he had risen to the position of sales manager for the entire company group. His time serving as the managing director for the SKF subsidiary in Paris between 1921 and 1922 proved pivotal, as he observed European bearing companies securing their market position through significant investments in automobile manufacturers.
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Gabrielsson initially proposed that SKF enter the automobile manufacturing business to increase bearing sales, but the company board declined. Undeterred, he began financing a prototype project personally in 1924, utilizing his own capital. He partnered with Gustaf Larson, formalizing their collaboration in a contract signed on 16 December 1925. This agreement stipulated that Larson would handle engineering and investment planning, with the condition that his reward depended on the project successfully producing 100 vehicles before 1 January 1928.
Founding and Expansion
The prototype phase involved designing the ÖV 4 model in a makeshift office located in Larson’s apartment. By June 1926, the team completed the first car and drove it to Gothenburg to present their final investment plan to the SKF board. On 10 August 1926, SKF agreed to adopt the project, utilizing the dormant subsidiary AB Volvo. Following a formal transfer of assets on 12 August 1926, Gabrielsson resigned from his SKF sales role to become the president and managing director of AB Volvo on 1 January 1927.
Fast facts
- Born: 1891, Korsberga, Sweden
- Died: 1962, Gothenburg, Sweden
- Education: Stockholm School of Economics, 1911
- Professional Role: Entrepreneur
- The KTH Great Prize: 1955
- Honorary Doctor: Stockholm University of Economics, 1959
Questions readers ask
How did Volvo start?
It began as a private venture funded by Assar Gabrielsson using his personal savings and sales commissions, before being sold to SKF and established as a formal automobile manufacturer in 1926.
What was the relationship between SKF and Volvo?
SKF owned the subsidiary Volvo AB, which became the entity for Gabrielsson’s automobile project after he presented a successful prototype and investment plan to the board.
Achievements
- The KTH Great Prize — 1955
- Educated at Stockholm School of Economics
