Volvo 2003 Annual Report Download - page 21

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19
impact and fuel consumption. The choice fell
to Volvo Penta’s newly launched 4- and 5-
liter diesel engines, the so-called workhorse
engines.
Market share development
Volvo Penta’s market shares among the boat
builders in the US were strengthened and
remained at high levels in Europe. Deliveries
of Volvo Penta’s new diesel engine range
started in the autumn of 2003. The new
range has been very well received by the
trade press and boat builders. In the indus-
trial engine sector Volvo Penta retained its
strong position in Europe. In Asia, the strong
development continued. China is now Volvo
Penta’s single largest market for industrial
engines.
Financial performance
Net sales in 2003 totaled SEK 7,596 M
compared with SEK 7,669 M in the preced-
ing year. The strong earnings performance in
recent years for Volvo Penta continued in
2003. Operating income amounted to SEK
695 M (647), which is Volvo Penta’s best
result to date. The operating margin for 2003
was 9.1% (8.4). Both sales and earnings
were negatively affected by an unfavorable
currency development, mainly from the
weaker USD.
Production and investments
All of Volvo Penta’s production facilities –
the diesel engine factories in Vara, Sweden,
and in Wuxi, China, and the gasoline engine
factory in Lexington, Tennessee, USA –
were operated at full capacity in 2003. The
production capacity in all of these factories
was increased in order to meet the strong
demand for Volvo Penta products. During
2003 the production of the new diesel
engines, D4-210 and D6-310, started in
Vara. The Vara plant will have parallel pro-
duction of these new engines together with
the existing 3- and 4-liter engines.
Ambitions for 2004
The activity levels for new product introduc-
tions will remain high during 2004. At the
same time Volvo Penta is now focusing
resources in order to secure efficient cus-
tomer support for the new products on the
market. The strategy to strengthen the co-
Net sales per market Volvo Penta
SEKM 2001 2002 2003
Western Europe 3,789 3,846 4,081
Eastern Europe 38 99 108
North America 2,175 2,261 2,109
South America 213 127 146
Asia 988 1,141 947
Other markets 177 195 205
Total 7,380 7,669 7,596
operation and the integration with key cus-
tomers in all business segments will continue.
Volvo Penta has no intention to compete with
its customers through the production of
boats or generator sets.