Volvo 2004 Annual Report Download - page 19

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17
RISK MANAGEMENT
and North America is particularly import-
ant to Volvo because a significant part of
the Group’s revenues are derived from
sales in these markets.
The cyclicality in demand for Volvo’s
products has at times resulted, and may
in the future result, in temporary con-
straints upon Volvo’s ability to produce
the quantities necessary to fulfill orders in
a timely manner.
To cope with the peaks and troughs in
our industries we need to act appropri-
ately in the various stages of the business
cycle. This may involve adjusting produc-
tion capacity and operating expenses.
Competition is intense among
manufacturers of commercial
vehicles and engines
Continued consolidation in the industry is
expected to create fewer but stronger
competitors. Volvo’s products face sub-
stantial competition from commercial
vehicles and engines provided by these
The commercial vehicles industry is
cyclical
The markets in which Volvo competes
have been subject to considerable volatil-
ity corresponding to cycles in the overall
business and economic environment in
general and in the industrial sector in par-
ticular. The rate of infrastructure spend-
ing, construction and mining, and housing
affect the Group’s operations as its prod-
ucts are an important part of these activ-
ities. Economic development in Europe