Volvo 2002 Annual Report Download - page 18

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16/17
Business Areas
Construction
Equipment
Volvo Construction Equipment (Volvo CE)
is one of the world’s leading companies in
the construction equipment industry with
production on four continents and distribu-
tion of products, spare parts and service
in more than 200 countries. The company
has historically held strong positions in
Europe and North America and is now
extending its presence in Asia (primarily in
China and Korea), South America and
Eastern Europe (primarily in Poland and
former Soviet union).
Volvo CE’s products are used in a
number of applications such as general
construction, road construction and main-
tenance, forestry, demolition, waste hand-
ling, mining and in the rental industry.
The product range comprises Excav-
ators, Wheel Loaders, Articulated Haulers,
Motor Graders, Backhoe Loaders, Skid
Steer Loaders and a range of compact
Wheel Loaders and compact Excavators.
The company also offers solutions for
financing, leasing, sales of used equip-
ment and have recently launched an ini-
tiative for the rental market, Volvo CE
Rents. At year-end 2002, 50 rental stores
had opened or were under development
agreements in US and Europe.
Tot a l market
The total combined world market for
heavy construction equipment and com-
pact equipment within Volvo CE’s prod-
uct range declined by 3% during 2002. In
North America the downturn was 12%.
Europe was down 6% while other markets
were up 7%.
The market for heavy construction
equipment increased by about 3% in
2002, of which North America showed a
decline of 7%, Europe approximately
10% and other markets up about 20%.
For compact equipment, the market fell
about 8% during the year, of which Europe
represented a decline of 5%, North America
17% and decline of 5% in other markets.
Business environment
In October 2002 Hitachi and Komatsu
announced that they will standardize and
share certain components. This move is
the first part of a business deal made by
the two companies in April outlining six
areas of cooperation. 2002 also saw
Terex continue its acquisition streak, this
time strengthening its position in Europe
by adding a major German machinery
manufacturer and reorganizing itself into
four separate units.
Market share development
Compared with the preceding year, Volvo
CE was able to strengthen its share of the
market in several important geographical
and product areas mainly due to recently
launched products backed by a strong
brand name.
The value of the order bookings as of
December 31, 2002 was 30% higher than
at year-end 2001.
The market in Western Europe con-
tinued to be the largest single market with
49% of sales, North America accounted
for 27% of sales, Asia represented 15%
and the rest of the world 9%.
98 99 00 01 02
19. 4 18 . 9 2 0 .0 21.1 21. 0
Net sales, SEK bn
98 99 00 01 02
1. 5 1. 7 1. 6 0 . 9 0 . 4
Operating income*, SEK bn
98 99 00 01 02
7.9 9.1 8.04.21.9
Operating Margin*, %
Net sales as percentage of Volvo Group sales, %
*excluding restructuring costs
*excluding restructuring costs
12%