The Volvo Group reported a fourth-quarter profit, boosted its 2011 truck-delivery forecast by 10 percent and said is considering investments to increase its manufacturing capacity in India.
“During the fourth quarter of 2010, the Volvo Group continued to grow at a good pace with higher sales in all regions, improved profitability and a very strong cash flow,” said Leif Johansson, President and CEO of Volvo AB, which is parent company of Volvo Trucks and Mack Trucks. “Year-on- year sales were up 23 percent to SEK 73.4 billion ($11.16 billion). Operating income improved to SEK 5.5 billion and the operating cash flow from Industrial operations amounted to SEK 15.1 billion.
“We ended 2010 strongly,” Mr Johansson said. “The gradual improvement in Europe continues and North America is now definitely recovering, at the same time as the emerging economies in countries such as Brazil, China and India continue their strong growth. However, the trend in Japan remains weak.”
Fourth-quarter operating income was about SEK 5.5 billion, compared with a loss of SEK 2.3 billion a year earlier, the Gothenburg, Sweden-based company said Friday. “The improvement in income is naturally attributable to us selling an increasing number of products and services, but it is also a result of a conscious effort to maintain our costs on a low level.”
Volvo, the second-largest global truck maker, delivered almost 57,000 trucks in the fourth quarter. Worldwide truck orders jumped 63 percent for the quarter from a year ago and 22 percent from the third quarter. Overall, Volvo delivered 180,000 vehicles in 2010 – a plus of 41 percent. Total worldwide truck sales rose 20 percent to $25.8 billion.
Volvo said it expects industry sales this year for Europe and North America to be 220,000 vehicles for each of those regions, up from a previous prediction of 200,000 in each market, Bloomberg reported. “In our Asian operations, our Indian joint-venture company with Eicher set new delivery records late in the year as a result of the strong Indian market and increasing market shares,” said Volvo CEO Leif Johansson.
“We have decided on key investments to increase our manufacturing capacity in India, which will further strengthen our position there, as well as the export of products to other markets. I have confidence in the Group’s performance, from both a short and long-term perspective.”
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