Volvo 2006 Annual Report Download - page 72

Buses
– new product program increases
the customer’s productivity
senger satisfaction. During 2006, the Volvo
9700 and Volvo 9900 were launched with a
new exterior design and with a broad range of
interior design options. Volvo Bus was also first
in the bus world to introduce front underrun
protection that reduces the risk of injuries to
drivers and passengers in an automobile in a
frontal collision with a bus.
The 7700 city bus was also redesigned and
equipped with a new 9-liter engine, which pro-
vides for more comfortable and efficient driving
in city traffic.
During the year, Volvo Buses introduced its
first city bus in India. The city of Bangalore pur-
chased 50 modern, air-conditioned city buses
with low entry.
Volvo Buses’ subsidiary in Canada, Nova Bus,
launched an articulated version of its city bus
Nova LFS during the year.
Nearing peak of business cycle
The total global bus market remained at a high
level in most parts of the world in 2006, but
there are signs that globally the business cycle
in the bus industry is now nearing its peak and
will soon turn downward. However, economic
growth in Asia remains strong and bus sales
continue to rise in many countries.
Calculating lifecycle costs
The trend toward larger bus operators contin-
ues. They are focusing increasingly on lifecycle
costs. Which increases the demand for fuel
economy, quality and aftermarket services.
Regional authorities place high demand with
regard to the environmental impact of buses.
As a result, an increasing number of bus manu-
facturers are conducting research and devel-
oping buses with alternative drivelines and for
alternative fuels.
>>> With today’s high fuel prices, Volvo Buses’
customers’ focus is on fuel consumption. Volvo
has chosen the SCR (Selective Catalytic
Reduction) technology to meet the new emis-
sions standards, primarily because fuel con-
sumption is then lower. Combined with
improvements in gearboxes and drive shafts,
fuel costs are reduced for customers.
Volvo Buses is a leader in environmentally
sound engines. Already today, customers can
purchase Volvo engines meeting emissions
standards that are not proposed to become
effective until 2009. In addition, a new gas
engine with very low emission levels was
released during the year, an engine that can
operate on biogas from renewable energy
sources.
In the coach segment, a stylish exterior and
interior design of the bus is important for pas-
Net sales as percentage
of Volvo Group sales
New modern design, new safety solutions and effi cient drivelines
with reduced fuel consumption. Volvo Buses renewed much of its
product range in 2006, a product portfolio that helps customers
to increase their productivity.
Operating margin1,2, %
2.8
05
3.8
06
(0.7)
02
(3.0)
03
2.0
04
0
New Volvo 9700 provides Volvo Buses’ customers
the conditions to improve productivity.
Net sales1, SEK bn
05 06
16.9
0302
14.0 12.0 12.7 16.6
04
Operating income (loss)1,2, SEK M
05 06030204
(94) (361) 253 470 633
0
1 Years 2004, 2005 and 2006 are reported in accordance
with IFRS and 2002 and 2003 in accordance with
Swedish GAAP. See Note 1 and 3.
2 Excluding write-down of shares in Henlys Group 2003
and 2004.
7%
68Business areas 2006