Volvo 1997 Annual Report Download - page 30

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28
Financial review by business area
Prévost, acquired in 1995, create a strong base for continuing
growth and expansion in North America.
Sharp growth in volum e
Volvo invoiced 8,730 buses and bus chassis in 1997, an increase
of 18%. Strong sales increases were achieved in many markets,
including China, the United States and Canada, Morocco,
Spain, Tunisia and the Nordic Region. The important Brazilian
market was weak in 1997. Some loss of volume in Brazil was
fully offset by sales in such other South American countries as
Chile and Venezuela. Volvo’s share of the global market for
heavy buses increased and the company strengthened its posi-
tion as a leading make in Western Europe with a 20% (19)
share of the market.
Significantly higher operating income
Operating income increased to SEK 550 M (331). The increase
was achieved as a result of larger volumes of business and
favorable foreign exchange rates. The operating margin in-
creased to 5.2% (3.9) and the return on operating capital rose
to 17% (12).
Production adapted to regional interests
The number of chassis produced increased by 19%, to 8,050
in 1997. Chassis are produced in Sweden, England and Brazil.
In Canada, Prévost produced 880 tourist buses and mobile
homes, 26% more than a year earlier. Prévost is the second
largest company in the tourist bus segment in North America.
Bus bodies are manufactured locally to ensure maximum adaptation to regional
interests. Volvo’s own production of bus bodies in Sweden, Denmark, Poland,
Germany, Austria and China amounted to 1,170 (1,020) units during the year.
Introduction of the B7R bus chassis
Volvo’s new B7R bus chassis was introduced internationally during the spring
of 1997. There is a broad area of applications for B7R chassis in intercity and
tourist buses in demanding environments. At year-end Buses received an order
for 300 tourist buses based on the B7R chassis, with the buyer having an option
to purchase an additional 300 units. The buyer is Saptco in Saudi Arabia and the
order opens a new market for Volvo’s bus operations.
Production in Russia
Volvo concluded an agreement to start production of buses with Säffle chassis in
Omsk, Russia early in 1998. The plant is initially being dimensioned to produce
250 buses per year and is expected to be placed in service in May 1998.
Volvo’s two producers of bus
bodies, Carrus and Säffle,
form the base for strategic
international m arket develop-
ment. Carrus m anufactures
city, intercity and tourist
buses m ade entirely of high-
grade stainless steel. Säffle
Karosseri produces bodies
made of light metal. These
bodies are m anufactured in
Denm ark and China, in addi-
tion to Sweden. Carrus pro-
duces bodies in Finland, Ger-
many, Austria and Poland.