Volvo CE sales drop –45%
By Chris Sleight22 July 2009
Volvo Construction Equipment's sales for the second quarter of 2009 were -45% lower than for the same period last year. As a result the company made an operating loss of -SEK 1,26 billion (€ 116 million), compared to a profit of SEK 1,63 billion (€ 150 million) a year ago.
With sales for the quarter falling to SEK 9,15 billion (€ 840 million) compared to SEK 16,7 billion (€ 1,54 billion) a year ago, the second quarter of the year saw Volvo cut back its manufacturing levels to just 30% of its capacity. Although this meant increased costs, the company also said it reduced its inventory.
Commenting on the results, Olof Persson, president of Volvo CE said," We are working hard to maintain a high pace in the implementation of the measures aimed at balancing our costs to suit these lower levels of demand. Despite the current weakness in our markets, I am convinced that the long term driving forces that generated growth in our industry continue to apply."
According to Volvo, the only bright sport in the global economy at present is China, where demand for construction equipment grew +6% in the second quarter. "Elsewhere, stimulus investments are yet to show signs of moving the market," it said in a statement.
For the full year, the company expects the European market to be down -40% to -50% on 2008 levels. North America is forecast for a -30% to -40% decline, and overall the global market is expected to be down -30% to -40%.