Volvo 2005 Annual Report Download - page 65

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Volvo Group 2005 61
Development of market shares
The total market share for the Volvo Group’s
truck operations in the heavy trucks segment
in Europe 27 was 25.2% in 2005, compared
with 26.5% a year earlier. Volvo Trucks’ market
share declined to 14.4% (15.2) primarily due
to lower deliveries to central Europe. Renault
Trucks’ market share declined to 10.8% (11.3)
as a result of a lower share of the French mar-
ket.
In North America, the total market share for
heavy trucks (Class 8) was 19.6% (19.4). Volvo
Trucks’ market share declined to 9.3% (9.7),
primarily as a result of limitations in production
capacity. Mack Trucks increased its market
share due to the very high demand in the com-
pany’s core segments to 10.3% (9.7).
In Brazil Volvo Trucks’ market share
increased to 13.6% (13.1).
Good earnings trend
Net sales for Volvo’s truck operations amoun t-
ed to SEK 155,396 M, which adjusted for
changed exchange rates corresponded to an
increase of 11%. The increase was attributable
to higher sales, primarily in North America,
South America and Other markets. Demand
in North America was driven by a continued
strong US economy, which resulted in
increased transport needs. In addition, there
is a need to renew truck fleets, which certain
hauling companies are doing prior to the new,
stricter emission legislation becoming effect-
ive at the beginning of 2007. In Europe,
demand rose somewhat from an already his-
torically high level. In total, Volvo delivered
214,379 trucks in 2005, 11% more than in the
preceding year.
Trucks’ operating income increased by 30%
to SEK 11,717 M (8,992) for 2005. The
increase is primarily related to North America,
where both Mack Trucks and Volvo Trucks
improved profitability as a result of good price
realization and increased sales volumes. In
Europe, Renault Trucks continued to improve
profitability, while it came down somewhat,
from a good level, for Volvo Trucks. The operat-
ing income in Europe was impacted by
increased costs during the second half of
2005 as a co n s equen ce of la unc he s and pro -
duction changeovers in connection with the
introduction of a new generation of trucks and
engines.
Production and investments
Renault Trucks’ plant in Blainville, France
opened a new, ultramodern facility for pre-
treatment of cabs for painting, with higher
capacity, better quality and improved environ-
mental features.
To meet the favorable demand for products
in the construction segment, Mack Trucks
started a second shift in May 2005 at the plant
in Macungie, Pennsylvania, in the US, which
increased production capacity by about 40%.
Investments to produce the engines of
tomorrow for the North American market con-
tinued in Hagerstown, Maryland in the US.
During the year, series production of Volvo’s
12- and 16-liter engines was started and pre-
production of the new Mack engines series
was initiated toward year-end.
Volvo Trucks opened a new assembly plant
in Durban, South Africa, as a consequence of
operations being discontinued at the plant in
Botswana. AB Volvo decided during the year
to invest SEK 650 M in a new paint shop at the
Umeå cab plant in Sweden. The new facility is
expected to be the world’s cleanest topcoat
paint shop.
Volvo Trucks Mack Trucks
04 05
9.7% 9.3% 9.7% 10.3%
1 In heavy trucks segment (class 8).
04 05
Volvo Trucks Renault Trucks
04 05
15.2% 14.4% 11. 3% 10.8%
1 In heavy trucks segment.
04 05
Market shares in Europe1
Market shares in North America1