Volvo 2001 Annual Report Download - page 8

Volvo in 2001
Large structural changes, business cycle
management and extensive product renewal
dominated the Volvo Group’s activities dur-
ing 2001.
The acquisition of Renault V.I. and Mack
Trucks is of course a radical structural
change, a milestone in the development of
the Group. It has given our business areas
the volumes, the structure and the geo-
graphical scope required for long-term suc-
cess.
The first phase of integration of the new
companies is accomplished according to
plan. A joint organization for the truck com-
panies’ purchasing, product planning and
product development is formed and will
similar to Powertrain have a key role in
securing synergies. Following new account-
ing standards, the integration process from
the acquisition had a negative effect on earn-
ings rather than an effect on goodwill.
Mack Trucks, Renault Trucks and Volvo
Trucks were established as separate business
areas from the beginning of 2002. This has
given them a greater presence and ability to
act more forcefully in the market.
Sharp decline in North America
The business conditions in North America
were – and continue to be – difficult, in par-
ticular for trucks, but construction equip-
ment, buses and engines for leisure boats
were also affected.
Markets in Western Europe weakened
slightly during the year, but from a high
level. Growth in Eastern Europe, Asia and
South America remained favorable, but
volumes were not sufficient to offset the
drop in North America.
97 98 99 00 01
Net sales*, SEK bn
87.1 107.6 116.4 120.4 180.6
* Excluding divested operations
0
97 98 99 00 01
Operating
income/loss*, SEK bn
8.3 8.5 7.5 6.7 (0.7)
* Excluding divested operations
To adapt operations to demand, we
reduced capacity and inventories. In the US,
for example, decisions were taken to close
the truck plant in Winnsboro and the fabri-
cation plant for construction equipment in
Asheville.
Many painful, yet necessary decisions
have been taken. Some 5,700 employees and
1,400 temporary employees and consultants
left Volvo during 2001.
Extensive product renewal
Despite the present difficult state of the
market, Volvo effected an extensive renewal
of the product segments during 2001. These
new products have improved Volvo’s com-
petitive position within all business areas.
The new Volvo FH, Renault Midlum and
Mack Granite set a new standard on our
truck range. These products promote the
company’s strong positions within long-
haulage, medium-heavy transports and con-
struction trucks.
With its largest industrial project ever, the
TX-platform, Buses has renewed its entire
product range in four years, and thus was
awarded “Busbuilder of the year 2002”.
Volvo CE introduced the new D-series of
articulated haulers and a complete range of
compact equipment.
Penta launched the leisure diesel engine,
KAD300 and strengthened its range of
industrial engines by launching a new 12-
liter engine and 5- to 7-liter engines for
mobile applications.
Aero entered Rolls Royce’s Trent-engine
program for the new Airbus generation and
signed a number of service contracts on
engines.
Comments by the Chief
Executive Officer
THE YEAR 2001
10
0
97 98 99 00 01
9.6 7.9 6.4 5.5 (0.4)
* Excluding divested operations
Operating margin*, %