Volvo 2011 Annual Report Download - page 66

In the commercial shipping area, Volvo Penta
delivers diesel engines for the toughest-possible
operating conditions. Coast guards, ferry com-
panies, port authorities and shipyards all over
the world use Volvo Penta’s reliable engines for
towing, passenger transports, patrolling and sea
rescue.
In the leisure boat industry, Volvo Penta
develops and delivers complete drive systems to
world-leading boat builders such as Fairline,
Sunseeker and Princess in the UK, Jeanneau/
Beneteau in France, Chaparral in the US and
Schaefer Yachts in Brazil.
Volvo Penta’s innovative technological solu-
tions for boats create competitiveness and cus-
tomer benefits in the form of lower fuel con-
sumption, easier manoeuvering and shorter
installation times. Through partnerships in the
communication and navigation area, and by fully
integrated drive systems, Volvo Penta offers
boat driving environments with a strong focus on
comfort and user-friendliness.
Volvo Penta’s customers have access to the
marine industry’s most global service and dealer
network with about 4,000 dealers worldwide.
In the industrial engine area, Volvo Penta
delivers diesel engines to world-leading customers
such as Cargotech in Finland, Sany in China,
Kohler in the US and Sandvik in Sweden. With
their unique performance, operational and environ-
mental features, Volvo Penta’s industrial engines
create strong competitiveness for this type of
global customers, and by utilizing the breadth
and strength of the Volvo Group’s combined
service offering, Volvo Penta can also offer effi-
cient support in the form of global service and
aftermarket services.
Volvo Penta contributes substantial synergies
and economies of scale to the Group’s total die-
sel engine manufacturing. About one-fifth of
volumes in the diesel engine plant in Skövde
comprise engines delivered by Volvo Penta.
More than half of the Group’s total volumes of
16-liter engines are delivered to Volvo Penta’s
customers.
Total market
The total market for industrial engines was
strong during the first half of the year, but
demand in Europe and North America weak-
ened toward year-end due to the debt crisis and
global financial turmoil. Stable demand was
noted in China and many other countries in Asia
and South America.
The total market for marine engines remained
largely unchanged compared with the weak
trend during recent years. European boat sales
were adversely impacted by bailout packages
and austerity measures in Southern Europe,
particularly in Italy and Spain. Domestic boat
sales in Italy, which is traditionally Volvo Penta’s
largest marine market in Europe, are estimated
to have decreased about 70% over five years.
In North America, boat sales were consistently
at historically low levels and as a result, total
demand for both marine gasoline and diesel
engines remained very low in the US.
Product renewal
With an aggressive focus on product develop-
ment and product renewal, Volvo Penta has cre-
ated a modern and highly competitive product
range for industrial engines in recent years. The
Volvo Group’s proven SCR technology enables
the industrial engine range to meet future emis-
sions regulations, while Volvo Penta can also
offer its customers significant installation ben-
efits and favorable operating economy.
On the marine side, Volvo Penta launched
D6-400 in 2011 – the world’s most powerful
diesel sterndrive. This 400-hp power package
confirms Volvo Penta’s world-leading position in
the diesel sterndrive segment.
Earnings trend
Sales amounted to SEK 8,859 M compared with
SEK 8,716 M in the preceding year. Operating
income was SEK 781 M compared with SEK
578 M in the preceding year. The operating mar-
gin was 8.8% (6.6). Earnings were positively
impacted by increased sales, effective cost con-
trol and a favorable product mix.
Production and investments
In 2011, Volvo Penta completed the launch of a
new logistics system that enables efficiency
enhancements across the entire chain – from
order to delivery.
In recent years, Volvo Penta’s engine plant in
Vara, Sweden has worked systematically to reduce
its environmental impact and energy costs. The
plant has accepted AB Volvo’s challenge to all
plants within the Group to become energy-
efficient and phase out fossil fuels. Due to these
efforts, all manufacturing in the Vara plant was
carbon neutral from 2011.
Volvo Penta offers complete drive systems for leisure boats and professional boats,
and for industrial applications such as power generation, cranes, pumps and container
trucks.
VOLVO PENTA
IMPROVED PROFITABILITY
Volvo Penta provides engines and power systems for
leisure and commercial craft, as well as for industrial
applications such as power generation and container
trucks.
Number of employees
1,338
Volvo Penta offers boat driving environments
with focus on comfort and user-friendliness.
Position on world market
Volvo Penta is the world’s largest producer of diesel
engines for leisure boats and a leading, independent
producer of industrial engines.
BOARD OF DIRECTORS’ REPORT 2011
62