Volvo 2001 Annual Report Download - page 48

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44
BUSINESS AREAS
has a diesel engine assembly factory in Wuxi,
China, inaugurated in 2000. This factory,
owned jointly with Wuxi Diesel Engine
Works, will be an industrial hub for the
Asian region. Volvo Penta has been approved
to extend its Chinese engine import license
to include marine commercial engines,
which will create new business opportuni-
ties and add volume to the already existing
industrial engine business in China.
Ambitions for 2002
In 2001, Volvo Penta continued the product
renewal which will be completed in the next
few years. The Asian business will continue
to expand and customer service in the region
will be further developed through an
extended dealer network. In the Parts seg-
ment, 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 distribution network, develop
engine sales to the mobile off-road market.
In the marine leisure industry, Yanmar is
expanding its diesel range to larger engines
and moving further into Volvo Penta’s tradi-
tionally strong segments. Caterpillar has
introduced a new 700-hp diesel engine series
which also will increase the competition in
the marine leisure industry.
Market development
During the year Volvo Penta reported
increased market shares in all business seg-
ments. Volvo Penta strengthened its already
very strong positions among boat builders in
Europe and in North America. Sales of Volvo
Penta’s industrial engines rose, resulting in a
substantial increase in shares of the growing
industrial engine markets in China and Saudi
Arabia.
Volvo Penta’s strategy to remain an inde-
pendant engine supplier and to focus on key
customers contributed significantly, as well
as the expanded product range, to maintain-
ing continued strong sales despite the weak-
er total markets.
Financial performance
Net sales in 2001 totaled SEK 7,380 M
(6,599), and operating income amounted to
SEK 658 M (484), an all-time-high in the
history of Volvo Penta. Operating margin for
2001 was 8.9% (7.3). The continued strong
increase in sales, combined with cost control
and favorable currency exchange rates, con-
tributed to the earnings improvement in
2001.
Production and investments
There was high utilization of capacity in
Volvo Penta’s plant in Vara, Sweden for pro-
duction of 3- and 4-liter diesel engines. The
gasoline engines are being produced in
Lexington, Tennessee, US. Volvo Penta also
Net sales per market Volvo Penta
SEK M 1999 2000 2001
Western Europe 2,986 3,204 3,789
Eastern Europe 26 30 38
North America 1,770 2,257 2,175
South America 134 160 213
Asia 692 794 988
Other markets 153 154 177
Total 5,761 6,599 7,380