Volvo sales grow on good markets

Volvo Construction Equipment’s sales were SEK 15.1 billion (US$ 2.53 billion) for the first quarter of the year, a +38% increase on the same period in 2007. The division made an operating profit of SEK 1.3 billion (US$ 218 million) over the quarter – up +38% on the first quarter of 2007. The company’s operating margin stayed at 8.6%.

Volvo says the global market for construction equipment was +7% higher in the most recent quarter, compared to the first three months of 2007, but with stark regional differences.

In North America, a –34% fall in the market for heavy equipment and a –21% decline in the compact market has seen a –23% overall deterioration in industry sales compared to a year ago. The market is also lower in Europe, with a +4% rise in heavy equipment sales being offset by a –10% fall in the compact market. Volvo says the net result is not a –6% overall decline.

However, these falls have been more than compensated for by high growth elsewhere in the world. The Asian equipment market is up +33% overall, and Volvo singles out China where sales of construction equipment were a massive +88% higher in the first quarter than a year ago. The market in the rest of the world was up +27% higher.

Commenting on these conditions, a statement from Volvo said, “Total world market conditions for 2008 are expected to remain on historically high levels, although not as good as 2007. The European market is expected to be flat in 2008 compared to last year. North America is expected to decline by –15% to –20%, while the rest of the world is expected to compensate for the US downturn with an expected growth of +20%.”