AFP, Stockholm :
A cost-cutting drive saved margins at Volvo Group despite a fall in sales and profits in the first quarter, the Swedish lorry maker announced Friday.
The manufacturer announced an 11 percent decline in net profit and a four percent downturn in sales for the quarter.
But profitability remained stable thanks to the company’s “lower cost base and focus on adaptating to changes in demand,” CEO Martin Lundstedt said in a statement.
Net income fell to 3.77 billion kroner (410 million euros) and turnover to 71.71 billion.
At constant exchange rates, the sales decline was only 2 percent, due to the weakness of the Swedish krona.
The operating margin, excluding exceptionals, was little changed, up 0.1 points to 6.1 percent.
The lorry market, where Volvo has seen its sales fall by 7 percent, is facing a mixed situation. It is the worst in South America, where it drops, while in North America it “is slowing from high levels,” said Lundstedt. However, “Asia is showing a stable trend” and “the European market is performing strongly” with orders up 23 percent year-on-year.
Among the group’s brands, France’s Renault Trucks saw its sales climb 15 percent, while those of Volvo (-13 percent), Japan’s UD (-12 percent) and US-based Mack (-46 percent) contracted.
“Production in Europe has been adjusted to meet the increase in demand,” said Volvo Group. Conversely, in North America, the pace was reduced to “allow for a inventory reduction at dealers.”
In construction machines (Volvo CE), where profitability is lower, Europe, and particularly France, helped offset weak markets in South America and the Middle East, hit by the commodity crisis.
Buses are on a positive trend in volume, although the unfavourable exchange cut the operating margin by half to 1.1 percent.
A cost-cutting drive saved margins at Volvo Group despite a fall in sales and profits in the first quarter, the Swedish lorry maker announced Friday.
The manufacturer announced an 11 percent decline in net profit and a four percent downturn in sales for the quarter.
But profitability remained stable thanks to the company’s “lower cost base and focus on adaptating to changes in demand,” CEO Martin Lundstedt said in a statement.
Net income fell to 3.77 billion kroner (410 million euros) and turnover to 71.71 billion.
At constant exchange rates, the sales decline was only 2 percent, due to the weakness of the Swedish krona.
The operating margin, excluding exceptionals, was little changed, up 0.1 points to 6.1 percent.
The lorry market, where Volvo has seen its sales fall by 7 percent, is facing a mixed situation. It is the worst in South America, where it drops, while in North America it “is slowing from high levels,” said Lundstedt. However, “Asia is showing a stable trend” and “the European market is performing strongly” with orders up 23 percent year-on-year.
Among the group’s brands, France’s Renault Trucks saw its sales climb 15 percent, while those of Volvo (-13 percent), Japan’s UD (-12 percent) and US-based Mack (-46 percent) contracted.
“Production in Europe has been adjusted to meet the increase in demand,” said Volvo Group. Conversely, in North America, the pace was reduced to “allow for a inventory reduction at dealers.”
In construction machines (Volvo CE), where profitability is lower, Europe, and particularly France, helped offset weak markets in South America and the Middle East, hit by the commodity crisis.
Buses are on a positive trend in volume, although the unfavourable exchange cut the operating margin by half to 1.1 percent.
