Volvo Construction Equipment ended 2016 with a strong performance, with market share gains in the larger, more profitable machine segments and net order intake increased by 35 %.
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Volvo Construction Equipment reported sales in North America up 35%[/caption]
North America saw a 35 % order intake increase from low levels in 2015. Overall, deliveries were up by 19% to 10,639 machines and its orders increased in all markets, most notably in China and Europe.
2016 fourth quarter net sales increased by 20% to $1,503m (SEK 13,110m). Adjusted operating income amounted to $56m (SEK 494m), corresponding to an operating margin of 3.8%.
Earnings gained from a favorable product mix, higher sales volumes, lower costs for credit losses in China and reduced operating expenses. Earnings were also helped by improved capacity utilization.
Through November the European market was up by 9 %, mainly driven by a strong recovery in the French market and considerable growth in Germany and Italy, while the market in the UK slowed. The Russian market started to recover from low levels in 2015 and recorded growth.
The North American market was 2 % below the preceding year, with a decline for larger machines. However, the market for compact equipment was positive, with growth driven mainly by the increase in demand for compact excavator.
The decline in South America continued throughout 2016. The Brazilian market was 44 % below 2015 and is experiencing low overall business confidence. The Asian market (excluding China) was 5 % below 2015 through November, mainly driven by a decline in Japan while India continued to grow strongly. The Chinese market was 3 % above the preceding year. This is the first growth after a long period of decline in the Chinese market. The excavator market started to recover in June and through November the market was up by 15 % compared with the previous year.
“Global demand for construction Equipment was largely flat in 2016,” says Martin Weissberg , president, Volvo Construction Equipment. “However, there were signs of progress in Asia. Volvo shows positive signs of growth in our stronghold segments of excavators, wheel loaders and articulated haulers. The ongoing work to improve Volvo CE’s competitiveness is yielding results.”
