Volvo break records on strength of international sales
STOCKHOLM, Sweden -- The Volvo Group says it wrapped up an "intense" 2007 in which sales and operating income reached record levels. The company soared on the back of several major acquisitions, established a strong presence in Asia, advanced positions in important product segments, and successfully managed widely shifting demand trends in main markets, including continued growth in Europe and Asia and a sharp decline in North America, stated Leif Johansson in a fourth quarter financial report to investors. "Following the acquisitions of Nissan Diesel, Lingong and Ingersoll Rand’s road development division, we now have a significant industrial structure in Asia, with a presence in Japan, China and, when the expected cooperation with Eicher Motors is in operation, also in India. These are rapidly growing markets and we want to be part of that growth," he said. In the fourth quarter, sales increased by 25 percent to SEK 84.6 billion and operating income rose 12 percent to SEK 5.8 billion. The operating margin of 6.8 percent was negatively affected by weak economic conditions in North America, combined with the introduction of new, more expensive EPA-mandated engines. However, Johansson noted that Volvo had "good stability and high Profitability" in Europe, where it increased deliveries during the fall, despite already strained production. "We are expanding production capacity, particularly against the background of very high demand in Eastern Europe," he said. "Following the acquisition of Nissan Diesel, Asia has grown to become our second largest truck market and we have continued high expectations about development there." Volvo estimates that the truck market in Europe will grow by 5-10 percent this year compared with 2007, with the industry’s delivery capacity as the limiting factor. "The North American truck market is difficult to assess, but we estimate that it will be on about the same level as in 2007," he said.