Volvo Construction Equipment posted a 28-percent sales increase in the fourth quarter of 2017, helping parent company Volvo Group achieve the highest sales and operating income in its history. Improve competitiveness coupled with growing demand – especially in Asia – helped Volvo CE deliver strong improvements in sales, operating income and order intake.
In the fourth quarter, net sales increased to SEK 16,733 million (about U.S. $2.116 billion) compared to SEK 13,110 million in last year’s fourth quarter, a 27.6-percent boost. Operating income was SEK 1,816 million, compared to SEK 494 million in the year-ago quarter. Earnings were positively impacted by higher sales and increased utilization.
For the full year, net sales increased to SEK 66,497 million (about U.S. 8.412 billion) compared to SEK 50,731 million a year ago, a 31.1-percent hike.
Sales in the North American market jumped 14.1 percent for the fully year and 13 percent in the fourth quarter, helped by greater demand for excavators. Demand in Europe improved and sales jumped 16.4 percent for the full year, and 9 percent in the fourth quarter. Sales to South America soared 24.5 percent for the full year. The Chinese market grew 74 percent in 2017, driven by greater demand for excavators and wheel loaders, with the market for large excavators leaping 121 percent, and compact excavators leaping 83 percent. Overall, sales to Asia increased 65.9 percent for the year.
During the fourth quarter of 2018, Volvo CE had a net order intake increase of 48 percent, largely driven by strong demand in China and North America. Deliveries increased by 49 percent during the period, again boosted by higher volumes in China.
“The performance program to strengthen Volvo CE’s competitiveness combined with increased market demand yielded good results in 2017,” said Melker Jernberg, the new president of Volvo Construction Equipment. “Volvo CE improved profitability and gained market share in several of our stronghold segments of excavators, wheel loaders and haulers.”
Volvo CE has begun 2018 in a confident mood. In January, the company announced that Volvo was entering the rigid hauler market, introducing four new models ranging from 45 to 100 tons.