Volvo CE first half sales drop 25%

Volvo Construction Equipment reported a 25% drop in revenues year-on-year for the first six months of 2013, to SEK28.2 billion (€3.3 billion).

The largest fall was seen in North America, where sales were down 41% year-on-year to SEK4.3 billion (€505 million). Sales in Asia fell 28% to SEK12.3 billion (€1.4 billion), sales in Europe fell 9% to SEK8.1 billion (€948 million), sales in South America fell 21% to SEK1.7 billion (€194 million) and sales in other markets fell 20% to SEK1.8 billion (€208 million).

Total first half operating income stood at SEK1.8 billion (€214 million), compared to SEK4.8 billion (€566 million) for the same period in 2012.

Olof Persson, president and CEO of Volvo Group, said weak demand in most of the global market had continued to impact Volvo CE’s sales.

“However, the decline in the key Chinese market slowed and demand stabilised at a lower level,” Mr Persson said.

For 2013 the total market in Europe is expected to decline by 5% to 15% (unchanged forecast) measured in units. North America, South America and China are all expected to be in the range of minus 5% to plus 5% (all forecasts unchanged). Asia excluding China is also expected to be in the range minus 5% to plus 5% (previous forecast 0% to minus 10%).

“Volvo CE’s total order intake was nearly at the same level as the year-earlier period, with improving trends in China, Europe and the Middle East, and a weaker trend in the rest of Asia and North America, where the order intake was at a high level last year when Volvo Rents and dealers renewed their rental fleets. Volvo CE continues to have good control of inventories in both the production and dealer channels,” Mr Persson said.

He also commented on news that Volvo CE’s Chinese joint venture, Shandong Lingong Construction Machinery (SDLG), is to introduce “competitively priced” alternative wheeled loaders to the North American market.

“With the launch of two wheeled-loader models in the US market, Volvo CE is also taking an important step to develop SDLG into a global brand,” Mr Persson said.