Volvo 2006 Annual Report Download - page 76

Volvo Penta
– innovative tradition
can reduce installation times by up to 75 percent
compared with traditional straight shafts, which
fac i li tates more efficient production. At the same
time, the boat builder can offer the end customer
a quieter and cleaner boat, with up to 30 per-
cent lower fuel consumption as well as signifi-
cantly improved performance and maneuver-
ability.
Volvo Penta works in the same fashion with
its industrial engine customers. By creating
customer benefits, such as shorter installation
times, improved fuel economy, environmental
features and performance backed by global
service support, Volvo Penta contributes to
enhanced competitiveness for customers, such
as Kalmar Industries and Atlas Copco.
Strong market in Europe
The total European market for marine as well as
industrial engines was strong in 2006. The
total market for marine engines weakened in
North America, while demand for industrial
engines was more stable. The total market in
Asia remained weak, due primarily to the low
demand for diesel gensets in China. In contrast,
the development on markets in other parts of
the world was positive, for example, Turkey and
South Africa.
New market shares
Volvo Penta continued to capture market
shares in most areas of its operations, particu-
larly the inboard market, in which the volumes
for Volvo Penta IPS increased steadily. At year-
end, there were slightly more than 100 boat
models from the world’s largest boat builders
with the new drive system.
In the industrial engine segment, diesel-
powered gensets are the predominantly most
important product for Volvo Penta, which dur-
ing the year strengthened its global market
shares in this segment.
>>> Volvo Penta has written marine history
through a number of pioneering innovations,
such as the Aquamatic drive and the counter-
rotating Duoprop propellers, both of which are
among the marine industry’s most important
innovations in history.
In recent years, Volvo Penta IPS, the drive
system with forward-facing propellers, and the
joystick, are recognized in the same fashion as
radical innovations in the way to propel boats.
Creates competitive advantages
The IPS system is a clear example of how prod-
uct development contributes to creating com-
petitive advantages for Volvo Penta’s custom-
ers, for example, such world-leading boat
builders as Bavaria, Beneteau/Jeanneau,
Cranchi, Sessa Marine, Azimut, Tiara, Four
Winns, Mustang and Intermarine.
By installing the IPS system, boat builders
Volvo Penta was founded in 1907 in conjunction with the production
of the fi rst marine engine, B1. Pentaverken soon became an estab-
lished engine manufacturer, which in 1927 delivered the engine
to Volvo’s fi r st passenger car. Volvo acquired Pentaverken in 1935
and Volvo Penta has been part of the Volvo Group since then.
With forward-facing propellers and steerable drive
units, Volvo Penta IPS represents an entirely new
concept in the marine industry.
Net sales as percentage
of Volvo Group sales Net sales1, SEK bn Operating income1, SEK M Operating margin1, %
05 06
10.5
0302
7.7 9.17.6 9.8
04
05
9.6
06
9.6
03
9.1
02
8.4
04
10.4
05 06
1,002
0302
647 940695 943
04
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.
4%
72Business areas 2006