Increased deliveries for Volvo Buses

Volvo Buses reports an increase in deliveries during the third quarter. 2,351 buses were delivered, which was an increase of 11% compared with the same quarter in the preceding year. The operating income was however negative.
The global bus market continued to decline during the third quarter, especially in the segment for coaches. The city bus market is also characterized by weakness, with the exception of the U.S., China and India, where governments through stimulus packages support the purchase of modern and environmentally friendly vehicles.

The coach market in Europe has continued to decline during the third quarter with a drop of 30–35%. The city bus market has also been affected by the downturn in the economy. In the U.S. and Canada the market for coaches continued to decline. The city bus market continued to develop steadily at a high rate. The coach market in Mexico shows the same pattern as in the U.S., and registrations decreased by 69% through August. In South America, the decline has been very severe for both intercity buses and coaches but there are signs of a slight recovery.

The toal bus registrations in region International (Asia, the Middle East, Australia and Africa) declined by approximately 30% during the fi rst half of the year, which is the latest reported period, compared to the same period in the preceding year. The decrease is mainly attributable to declining city bus markets in China and India.

The order intake in the third quarter was 2,547 buses and chassis, which was an increase of 10% compared to the preceding year. Order intake increased in Asia and South America while it declined by 47% in Europe.

During the quarter a total of 2,351 buses (2,119) were delivered, an increase of 11% compared with the same quarter in the preceding year. The shift in market mix continues with a sharp increase in Asia (+120%) and lower deliveries in Europe (-24%) and North and South America (–22% and –46% respectively).

Net sales in the third quarter amounted to SEK 3,990 M (3,822), which was an increase of 4%. Adjusted for exchange-rate fluctuations, net sales decreased by 2%. The operating loss amounted to SEK 91 M, compared to an operating loss of SEK 72 M for the third quarter of 2008. The operating margin was a negative 2.3% (Negative 1.9%). The operating income was negatively affected by a negative product and market mix and supply disturbances during the capacity increase in the North American city bus production.

The negative market development combined with the significant change in market mix demands further cost reductions. Earlier program continue with undiminished force in order to reduce inventories and lower costs.

During the third quarter a number of important contracts were signed, whereof an order for 150 double-deckers with the environmentally friendly EuroV engines to Singapore. During the autumn, Volvo Buses has also received a number of orders for high-capacity buses, among others 100 bi-articulated buses to Sao Paolo in Brazil and 134 articulated buses to Transmilenio in Bogota, Colombia. Volvo Buses has thereby strengthened its position as a leading supplier of BRT-systems globally.

Net sales by market area

Third quarter

 

First nine months

 

SEK M

2009

2008

Change in %

2009

2008

Change in %

Europe

1,589

1,547

3

5,693

5,295

8

North America

1,177

1,239

(5)

3,749

3,625

3

South America

197

368

(46)

669

871

(23)

Asia

841

468

80

1,782

1,381

29

Other markets

186

200

(7)

779

590

32

Total

3,990

3,822

4

12,672

11,762

8