Volvo 2000 Annual Report Download - page 40

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38
THE VOLVO GROUP YEAR 2000
MARINE AND INDUSTRIAL POWER SYSTEMS
Sales and market shares
Volvo Penta’s net sales during 2000 increased by 14.5%, to SEK 6,599 M (5,761), due primar-
ily to strong sales of marine engines in North America and Europe. Sales in Asia and other
international markets developed favorably and sales of industrial engines
increased in all markets.
Volvo Penta continued to increase its market share for marine engines and
strengthened its position in the industrial engine field in Europe. A large
number of new products were introduced during the year and they have been well received
in the market. The value of the order book at December 31, 2000 was 13.8% higher than at
the end of 1999.
Operating income
Operating income, which was the best ever, amounted to SEK 484 M (314), including a
refund of SEK 41 M from SPP. The operating margin increased substantially, to 7.3% (5.5%).
Cost constraints and larger sales volumes in all markets contributed to the positive outcome
in 2000. The return on operating capital exceeded 25%.
Production and investments
During 2000, there was high utilization of capacity in the plants in Sweden and the U.S. Volvo
Penta’s and Wuxi Diesel Engine Works’ joint-venture company, the Wuxi Da-Hao Power
Company, inaugurated its assembly plant. The plant is located in Wuxi, China, with a full
capacity of 5,000 engines per year. During the year Volvo Penta decided to invest nearly SEK
100 million in its engine plant in Vara, Sweden.
Ambitions for 2001
In 2000, Volvo Penta entered a phase of product renewal that will be completed during the
next few years. The Asian operations will continue to expand. The factory in Wuxi will be an
industrial hub for the Asian region and customer service will be further developed through an
extended dealer network. In the Parts segment, the newly launched e-commerce interface, the
Volvo Penta Partner network, will be implemented on a global basis and new functions will be
introduced. In North America, Volvo Penta will continue to expand its diesel engine business
and, based on the established distributor network, develop engine sales to the mobile off-road
market.
Strategic development
During the years ahead, Volvo Penta’s ambition is to continue to grow through an aggressive
product development program, and customer services will be expanded. Within the industrial
segment, growth will be accomplished through focused actions to win new customers in new
segments.
The launch of new diesel engines during 2000 and 2001 will increase Volvo Penta’s com-
petitiveness within the marine commercial segment. Expansion of the North American busi-
ness geared to the use of gasoline during the past few years has created an important customer
base and an extensive dealer network, which forms a platform for further expansion in diesel
engines.
Best year ever