Volvo’s sales growth was slightly ahead of the 51% growth in the world market between January and March 2011.
The company’s net sales during the first three months were driven strongly by surges in demand in Asia and South America, rising SEK 15.76bn (£1.56bn). Operating income reached SEK 1,708 M (£169m).
Operating margin also improved, at 10.8%, up from 9.0%, due to higher sales and cost reduction activities.
The value of Volvo Construction Equipment’s order book on 31 March 2011 was also significantly improved, 40% higher than on the same date in 2010.
Sales in were up 57% in Europe, 59% in North America and 64% in Asia, led by 70% growth in China. South America sales rose by 38%.
Volvo expects total world market growth in 2011 of between 20 and 30%. Expectations for both Europe and North America have been revised upwards; with Europe forecast to grow by 10-20% (previously forecast 5-15%) while North America is expected to rise 25-30% (previously forecast 20-30%). Hopes for China have also been marked up, with the country now expected to grow by between 20-30%, up from the 5-15% previously stated. The total Asian market is forecast to grow by 10-20%, while South America is expected to expand by between 5-15%.
Eventful three months
It was an exciting quarter for the company, which saw the introduction of over 50 new models to its dealers and customers in Europe and North America. Added to this Volvo became the largest producer of excavators and wheel loaders in China, and its new L220G wheel loader won the coveted Red Dot design award. The company also unveiled plans to invest $100 million in its Shippensburg facility in the US and start production of wheel loaders, excavators and articulated haulers at the site. There was also a change of leadership announced during the first quarter; with Pat Olney replacing Olof Persson as President of Volvo Construction Equipment on May 1st, as Mr. Persson takes up his new role of Executive Vice President and deputy CEO of the Volvo Group.
“We have seen the favourable trend continue in both the Chinese and Brazilian markets, while the recovery in North America and Europe is becoming increasingly clear,” said Volvo Construction Equipment president Olof Persson. “We are in an intense period of product renewal, which will contribute to further strengthen our competitiveness.”
On 1 May Mr Persson steps up to become executive vice president and deputy CEO of the Volvo Group. Pat Olney takes his place as head of the construction division.
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