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Truck Maker Volvo Returns to Profit in Q3

Mon November 01, 2010 - National Edition
Lousie Nordstrom



STOCKHOLM (AP) Swedish truck maker AB Volvo said Oct. 22 it returned to a profit in the third quarter, helped by strong demand in Brazil, India, China and Russia as well as a rebound in its mature markets.

The Goteborg-headquartered group reported a net profit of $421 million in the quarter, in contrast with last year’s loss. Revenues soared 32 percent.

Volvo said almost half of its total sales came from outside its traditional markets, including Brazil, India, China and Russia, but that both North America and the European truck market were performing well, too.

Volvo CEO Leif Johansson said the launch of a new type of trucks in North America — equipped with engines that meet new tough emission regulations — have been well received by the market there.

“We are continuing to hear many positive comments about the trucks from our customers,” he said.

In Europe, Johansson said the market is recovering at a good pace, particularly in the central and northern parts of the continent.

“The recovery there has been somewhat swifter and stronger than we expected, and we have progressively increased the rate of production in our plants to meet the rise in order intake,” he said.

The Truck unit, which is Volvo’s largest, reported a 36 percent increase in sales for the quarter.

The group also maintained its 2010 forecast for heavy duty trucks, predicting a 20-30 percent total growth in the North American market, and 10 percent in the European market.

Sydbank analyst Morten Imsgard said that the report looked “pretty strong” overall, especially the truck order intake.

He said the development in South America and Asia looks very promising for the future, coupled also with the improvements in Europe and North America.

“This is a sign that revenues can grow in the coming quarters,” he said.

Volvo, which has around 90,000 full-time staff, also makes buses, engines and construction equipment. It sold its car division to U.S.-based Ford Motor Co. in 1999, which in turn sold it to China’s Geely Holding Group earlier this year.