Increased order bookings for Volvo Buses

Volvo Buses reports a profit of SEK 155 M for the third quarter. Both sales and order bookings were higher than in the third quarter of 2009.

The European market for buses continues to be weak and year to date September recorded a decline of approximately 10% compared with 2009. However a small recovery can be noted for coaches.

In North America, the negative trend for city buses and coaches continues and the market for coaches is expected to reach a historically low level in 2010. Mexico showed signs of a weak recovery, albeit from very low levels. The interest in coaches is increasing in South America, while the level for city buses is favorable.

In Asia and Other markets, the market trend is generally positive with greater interest in heavy buses, especially in Asia.

Order intake for the quarter amounted to 2,845 buses, compared to 2,547 buses in the preceding year, which represents an increase of 12%. Deliveries declined in the third quarter by 9% to 2,151 buses, compared with 2,351 buses in the third quarter of 2009 primarily as a consequence of a decline in China after the large bus deliveries to the World Expo in Shanghai during the spring.

In the third quarter net sales increased by 15% to SEK 4,594 M (3,990). Adjusted for currency fluctuations, net sales increased by 13%. Previous investments in the US is now resulting in good sales development with increased market shares.

Operating income amounted to SEK 155 M compared with an operating loss of SEK 91 M in the third quarter of 2009. The operating margin was 3.4% compared with a negative 2.3% in the third quarter of 2009. The improvement is a result of higher sales, improved market mix and cost rationalizations.

As the global bus market has not shown any signs of a significant recovery, efforts continue with the aim of achieving a satisfactory profitability on existing volumes as
well as focusing on tender business in order to improve the order intake, especially in Europe and North America.

Volvo Buses launched two new products during the third quarter. The first of these, the 8900 Intercity has a completely new body and chassi and is built on a modular concept. The second, the 9500 coach, is a complement to the 9700 and 9900 and answers to the increased demand in the medium segment of the market.

A number of important orders have been signed this quarter including 1,000 bus chassis for Panama City. Low fuel consumption and high accessibility were decisive for the customer. Deliveries start at the end of 2010.

An order for 300 chassis for double-deckers has been secured from SBS Transit in Singapore. For environmental reasons, SBS has again chosen Volvo’s Euro V engines even though these are not yet a requirement in Singapore.

Net sales by market area

Third quarter

 

First nine months

 

SEK M

2010

2009

Change in %

2010

2009

Change in %

Europe

1,339

1,589

(16)

4,661

5,693

(18)

North America

1,553

1,177

32

5,315

3,749

42

South America

432

197

119

1,155

669

73

Asia

775

841

(8)

2,352

1,782

32

Other markets

496

186

166

1,431

779

84

Total

4,594

3,990

15

14,914

12,672

18