Volvo Buses reports an increase in both order intake and deliveries during the fourth quarter 2009 compared with the same quarter in the preceding year. The operating income was however negative.
The global bus market has stabilized on a low level with a positive development in South America and Asia. During 2009 the coach market fell by 35-60 % depending on market, which, in spite of increased market shares, reduced Volvo Buses’ sales of coaches. The city bus market did not decline as much, 0-25 % depending on market.
Government stimulus packages for the purchase of modern, environmentally friendly buses in Asia have held volumes up. The North American bus market is predicted to recover somewhat in 2010. In Europe a stable, low level is expected and in the rest of the world a positive development is forecasted.
Increased order intake During the fourth quarter, order intake increased by 34 % to 3,003 buses and chassis compared to 2,238 in the preceding year. Order intake improved in Mexico, South America, Europe and Asia.
During the quarter 3,272 buses were delivered (3,080), which was an increase of 6 % from the preceding year. From a profitability standpoint the product and market mix continued to be unfavorable with significantly lower sales of coaches in North America and Europe and increased sales of city buses in India and China.
Operating loss in the quarter During the fourth quarter, net sales increased by 4 % to SEK 5,793M (5,589). Adjusted for currency movements, net sales increased by 6 %. Compared to the third quarter of 2009, net sales increased by 45 %.
The operating loss amounted to SEK 46 M compared to an operating loss of SEK 91 M in the third quarter of 2009 and an operating income of SEK 72 M in the fourth quarter of 2008. The operating margin was a negative 0.8 % compared to a negative 2.3 % in the third quarter of 2009 and a positive 1.3 % in the fourth quarter of 2008.
Profitability was negatively affected by the product and market mix and costs relating to production disturbances in Nova Bus in North America. During the quarter Volvo Buses reduced inventories significantly.
Continued cost cutting The ongoing global programs to reduce costs and improve capital efficiency contributed to reduce the operating loss in the fourth quarter 2009 compared to the third quarter 2009. However, focus remains on lowering breakeven levels in every region to secure profitability.
In January, 2010 Norwegian Nettbuss ordered 12 Volvo 7700 hybrid buses for delivery in 2010. Nettbuss thereby became the first company in the Nordic region to implement the hybrid technology commercially.