Volvo 2010 Annual Report Download - page 26

Download and view the complete annual report

Please find page 26 of the 2010 Volvo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 154

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154

EN GLOBAL KONCERN 2010
Long-term increase in demand for
the Group’s products and services
A GLOBAL GROUP 2010
Long-term growth
In the long-term, demand for freight capacity, and
thus many of the Group’s products, is closely
linked to the GDP trend. The extent of investment
in infrastructure, which drives demand for building
and construction equipment, is also, closely
linked to the GDP trend. In the short-term,
demand is affected by a number of factors includ-
ing fuel prices, the implementation of new emis-
sion regulations, interest rates, etc.
From a historical perspective, despite the
recovery in the truck and construction equipment
markets in 2010, demand was below the long-
term trend in Europe, North America and Japan.
The Volvo Group sees no development that would
imply that the connection between GDP trends
and the sales of vehicles and machines would
have changed and, accordingly, the view is that in
time, demand will recover and return to levels cor-
responding with the long-term trend.
MARKET OVERVIEW
During 2009, the Group’s mature markets showed a sharp decline in demand and during 2010 a
gradual recovery from historically low levels. Demand in the Group’s growth markets were affected
to a much lesser extent by the financial crisis. After a brief downturn at the beginning of 2009,
these markets returned to growth, and they showed a continued good growth in 2010.
North America
In North America, sales of heavy-duty trucks rose 20%
to 142,096 vehicles (117,983), primarily driven by rising
demand for trucks for long distance haulage and
regional distribution. The market for construction trucks
remained weak. The market for construction equipment
rose 20% after a three-year decline. However, the mar-
ket still remained at a low level.
Despite the uncertain macroeconomic trend, the need
to replace old trucks and upgrade the truck fleets is sub-
stantial, which is expected to drive an improvement in
demand. The total market for heavy-duty trucks in North
America is expected to amount to approximately
220,000 trucks in 2011. The market for construction
equipment is expected to grow by 20–30% in 2011.
1995 2000 2005 20101990
0
80
160
240
320
400
Heavy-duty truck market, North America
Vehicles, thousands
South America
In South America, the key Brazilian market
remained strong, primarily due to a healthy econ-
omy with strong growth in GDP, but also due to
support measures including advantageous
financing. The Brazilian market for heavy-duty
trucks rose 64% to 109,760 vehicles (66,950). In
South America as a whole, the market rose 61%
to 138,763 heavy trucks (86,398). In Brazil, the
market for construction equipment rose 68%.
The pace of growth in the South American
truck market is expected to plane out during
2011 after an extremely strong 2010, but despite
this, demand is expected to remain at a healthy
level. The Brazilian market for construction equip-
ment is expected to grow by 5–15% in 2011.
1995 2000 2005 20101990
0
30
60
90
120
Heavy-duty truck market, Brazil
Vehicles, thousands
22