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By Bloomberg

Volvo AB, under shareholder pressure to boost profit margins, ousted Olof Persson as chief executive officer, as the world’s second-largest truckmaker seeks to revamp strategy amid tougher competition.

Martin Lundstedt, the top executive at rival truckmaker Scania AB, will succeed Persson in October, the Gothenburg, Sweden-based company said in a statement Wednesday. In the interim, Chief Financial Officer Jan Gurander will take over Persson’s responsibilities as of today. Volvo shares surged the most in more than six years.

Volvo is seeking to finalize its business review by the end of this year, Gurander said during a conference call with analysts. “That’s our challenge, from which we’ll start fresh into 2016.”

The sudden change in leadership follows efforts by Cevian Capital AB, the second-largest owner of Volvo’s voting rights, to lobby the truckmaker to streamline operations and boost margins. Volvo is intensifying a push for growth and increased profitability, as the world’s second-largest maker of commercial vehicles faces increased competition from Volkswagen AG, which bought Scania and Germany’s MAN SE in recent years. Persson led the truckmaker for almost four years.

The CEO appointment “may now spark discussions about his new agenda and what it will mean for the group’s strategy,” Michael Raab, a Frankfurt-based analyst with Kepler Cheuvreux said in an report. “Considering that the fate of Volvo hinges on trucks, his strong background in this industry is clearly helpful.”

Shares Surge

Volvo’s shares soared as much as 16 percent, the biggest intraday jump since February 2009, and were up 12 percent at 113.70 kronor at 11:39 a.m. in Stockholm. That pushed the stock’s gain for the year to 34 percent, valuing the manufacturer at 242 billion kronor ($28 billion).

Cevian, which holds 14 percent of Volvo’s votes, welcomed the management change. Co-founder Christer Gardell said Lundstedt is “very well suited” to take the truckmaker’s profitability to the next level. “There’s probably no one better,” he said in an e-mailed response to questions. In 2010, Gardell supported Persson as a successor to long-time CEO Leif Johansson.

Persson had set a target of making Volvo the most profitable heavy-truck maker by realigning production of the European Volvo and Renault brands, cutting overhead costs and expanding overseas. The company didn’t make the executive available for comment.

Fatter Margins

The new CEO faces the challenge of restructuring a European production network that’s “too dispersed” in part because of past acquisitions and local political interests, said Kepler’s Raab.

Still, Volvo’s operations have improved. In the first quarter, Volvo’s margin rose to 6.1 percent from 3.9 percent as operating profit, excluding restructuring charges and a gain from the sale of shares in Eicher Motors Ltd., climbed to 4.6 billion kronor. Including those items, operating profit was 7.07 billion kronor.

Lundstedt has spent his career at Soedertaelje, Sweden- based Scania and has been president and CEO of Scania since 2012. Starting this year, he reported to Volkswagen’s new trucks chief Andreas Renschler, who previously led Daimler AG’s commercial-vehicles division, the biggest in the world. Renschler joined Volkswagen this year to push integration between Scania, MAN and VW’s delivery-van business.

“After three years of focus on product renewal, internal efficiency and restructuring, the Volvo group is gradually entering a new phase with an intensified focus on growth and increased profitability,” Volvo Chairman Carl-Henric Svanberg said in the statement. Lundstedt is known for his “winning leadership style.”