Volvo 2005 Annual Report Download - page 67

Volvo Group 2005 63
with few suppliers who can offer complete
solutions: vehicles, financing, after-market
and various forms of software solutions.
Regional authorities and large cities are
placing heavy demands on bus safety and
minimal environmental impact. There is also an
increasing demand for vehicles that operate
on alternative fuels.
The increasingly difficult traffic situation in
many large cities has led to a growing interest
in Bus Rapid Transit (BRT) systems, which
allows buses to travel in separate bus lanes.
The buses are modern articulated buses with
a high capacity and the bus stops are adapted
for rapid boarding and exiting. Volvo Buses is
the leading supplier of buses within BRT.
Increased deliveries in most markets
Volvo delivered 10,675 buses and bus chassis
(8,232) during 2005. Increased sales were
reported in many markets, including Europe,
North America, South America and parts of
Asia.
During the year, Volvo Buses received an
order for 1,779 city buses for the Transantiago
BRT system in Santiago, Chile.
However, volumes were lower in China dur-
ing the year, even though at the end of the year
Volvo Buses received its largest order to date
when Shanghai’s largest transport company,
Shanghai Ba-Shi Group, ordered 2,000 buses.
The order was for the Volvo B6R, Volvo’s new
10.5-meter long city bus. The buses will be
delivered by the end of summer 2007.
Volvo’s market share was strengthened in
nearly all markets, with the exception of China
and Brazil. The company maintained its pos-
ition as market leader in the Nordic region and
in the UK. In Europe, the market share
increased to 15.0% (14.1) and in the North
American coach segment market share rose
to 19.9% (18.9).
Number of vehicles delivered
2004 2005
Western Europe 3,073 3,385
Eastern Europe 344 338
North America 1,388 1,546
South America 624 2,297
Asia 2,341 2,554
Other markets 462 555
Total 8,232 10,675
Net sales per market
SEK M 2004 2005
Europe 6,948 7,142
North America 2,960 4,247
South America 521 2,641
Asia 1,632 1,612
Other markets 661 947
Total 12,722 16,589
Positive earnings trend
Net sales during 2005 rose to SEK 16,589 M
(12,722). The increase was attributable largely
to increased sales and improved pricing.
Operating income increased from SEK 158 M,
including a write-down of shares SEK 95 M,
to SEK 470 M. The improved earnings were
due to increased volumes, higher prices, prior
restructuring and general cost reductions.
Earnings were adversely affected by SEK
95 M in costs for the closure of the plant in
Heilbronn, Germany.
Increased production
During the year, Volvo produced 10,406 buses
(8,089) and bus chassis. The chassis plant
in Borås, Sweden, produced more complete
chassis and kits than ever before and the plant
in Wroclaw, Poland, manufactured a record
number of buses.
Volvo Buses has a broad range of
modern buses that offer efficient
transport solutions. The product
offering includes complete buses and chassis
for city and intercity traffic, as well as
coaches.
In 2005, a low-floor version of the Volvo
B9S was launched, both as an articulated bus
and a bi-articulated bus. The new Volvo B6R
midibus was presented in China together with
an updated version of the Volvo 9300. In India,
the Volvo B7RLE city bus was launched and
an updated version of the Volvo 8300 was
introduced in Mexico. In Europe, the Volvo
8700 BLEA articulated bus was launched.
The business area also continued its broad-
ening of a complete offering to customers,
including such actions as opening new Bus
Service Centers and a continued focus on
service contracts and financial solutions. Also
during the year, the company began to offer
customers assistance with the analysis and
improvement of fuel consumption.
Growing market in Asia
The total bus market rose moderately or con-
tinued at a high level in most parts of the
world during 2005. However, a slowdown
was noted in Europe at the end of the year.
Economic growth in Asia remained strong and
bus sales continued to rise in many countries.
Considerable price pressure continued in
many markets.
Increased customer demands
The consolidation trend toward large bus
operators continues, however, there is still
potential for small companies in the coach
s e gm e n t. T h e l ar ge op er a to rs ar e e x pe cte d t o
become stronger as they focus on reliability
and life-cycle costs. They want to cooperate