Volvo 1997 Annual Report Download - page 6

Download and view the complete annual report

Please find page 6 of the 1997 Volvo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 93

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93

4
The growth in Volvo’s earnings in
1997 was satisfactory. Sales and oper-
ating income increased in all business
areas. The level of activity was high and the good results are to be attributed to
the great efforts and fine performance of employees throughout the Group.
The greatest improvement took place in Cars. The upgrading
of the product line through the addition of new versions of the
Volvo S40 and V40 and the Volvo S70 and V70 resulted in a
better price picture and the highest sales recorded during the
1990s. In North America, where our four-wheel drive cars,
Volvo V70 AWD and the Volvo V70 XC were major successes,
sales of Volvo cars exceeded 100,000 for the first time since the
end of the 1980s. It has now been decided to introduce the
Volvo S40 and V40 in North America, which means that the
North American market is being offered the same broad product
line as Europe.
It is also gratifying that Trucks’ earnings improved steadily
during the year. Volumes of sales increased in the United States,
where the Volvo VN and 770 trucks are highly attractive. The
restructuring measures involving concentration of production in
a single plant have now had an impact and the North American
operations showed an operating profit in the fourth quarter. The
operations in South America also stabilized. Trucks’ share of the
European market declined slightly. Sales in Eastern Europe rose
strikingly, but from a relatively modest level.
Buses is in an expansive phase and its earnings improved substantially. Agree-
ment was reached at year-end to acquire Nova BUS, the leader in the market for
city buses in the US and Canada. Carrus O y, the largest producer of bus bodies
in the Nordic region, was acquired at year-end. The work of creating an industrial
and commercial base in Russia is proceeding according to plan and an agreement
has been reached covering the production of buses in the city of Omsk. At the
end of the year Volvo received a large order for natural-gas buses in France; this
is fully in line with our desire to participate in programs for efficient and
environmentally compatible transport systems for urban traffic.
Sales and earnings of Construction Equipment improved, due in part to organic
growth and in part to the acquisition of Champion Road Machinery, a Canadian
company. The efforts to establish strong footholds in such growth markets as
East Asia and South America are continuing.
Marine and industrial engines returned to an acceptable level of profitability in
1997 as a result in part of a 15% increase in sales and the introduction of a new,
customer-oriented marketing organization. Volvo Penta’s global growth is continu-
ing through a joint venture in China and closer cooperation with Mitsubishi
Heavy Industries.
Comments by the
Chief Executive
Officer 1997 – Growth in volume
and improved profitability
“ The growth in Volvo’s earnings
in 1997 was satisfactory.
Sales and operating income
increased in all business areas.”