Volvo 1999 Annual Report Download - page 36

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Fiscal year 1999
34
Capital expenditures for property, plant and equipment amounted to SEK 578 M
(630), of which the greater part pertained to investments in connection with the
changeover of production for new products, and measures to increase capacity.
Strategic developm ent
Since 1995, when Volvo Construction Equipment became a wholly owned subsidiary
within the Volvo Group, work has been geared in accordance with an aggressive
growth strategy.Through development of own products and acquisitions, Construction
Equipment expanded its product areas and broadened its customer offering. The goal
of the growth strategy is to be able to offer a complete range of construction
equipment products. The acquisition in South Korea was of major strategic signifi-
cance, resulting in a considerably improved position, in terms of market and product,
particularly with regard to excavators.
Goals for the year 2000
A number of important product launches involving new generations of wheel-loaders
and excavators, among other equipment, are taking place during the first quarter of the
year 2000. In the North American market the emphasis on small machines is being
increased, in part through the launching of the compact excavators that were intro-
duced in Europe during 1999. Together with its compact wheel-loaders,Volvo thus has
a competitive product program in the fast-growing “Compact” segment.
The introduction to Volvo CE’s dealers of the Volvo excavators that are being manu-
factured in South Korea, which was begun in 1999, is continuing with undiminished
vigor in the year 2000. These excavators, which are highly competitive, have been well
received in the market, and an increase in the utilization of capacity in South Korea is
planned. In addition, preparations are being made to produce more Volvo CE products.
Volvo CE’s goals for the year 2000 also include reducing purchasing costs, as well as
measures to increase productivity in connection with the development of new
products.
During the year 2000 major emphasis is also being placed on further developing
Volvo CE’s “soft” products such as leasing, financing and service contracts, and on sales
of pre-owned equipment.
Marine and Industrial Engines
Total m arket
The world market for marine engines increased slightly in 1999, compared with 1998,
due to the strong economy in North America. The market for marine engines in
Europe strengthened increasingly during the latter part of the year and demand for the
year as a whole was on the same level as in 1998. Demand for marine engines in Asia
continued to be weak in 1999 and there were no signs of recovery in the near future.
The world market for industrial engines continued to grow in 1999 and the trend in
Europe was notably strong.
Elaine Tereza
Teixiera, Operator
Volvo Trucks
Curitiba, Brazil
Changes such as
self-managed
groups and closer
contacts with
other Volvo plants
has given
employees the
possibility to grow,
personally and
professionally.
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