Volvo 2012 Annual Report Download - page 42

A GLOBAL GROUP 2012 GROUP PERFORMANCE
Weak markets
In 2012 the heavy-duty truck market in Europe
28 (EU's 27 member states minus Bulgaria plus
Norway and Switzerland) decreased by 9% to
221,000 trucks compared to 242,200 in the
preceding year. The markets in Southern Europe
weakened further during the year and the
weaker market conditions spread to large parts
of Europe. Demand held up better in Germany,
Scandinavia and the UK. The Russian market
was strong for most of the year. In 2013, the
market in Europe 29 is expected to amount to
about 230,000 heavy-duty trucks.
The Group’s truck business had somewhat
lower market shares during 2012 compared
with the previous year. Part of the reason is the
weak market development in Southern Europe,
where Renault Trucks has a traditionally strong
position. A shift in market mix with a relatively
stronger demand in Germany, where the Volvo
Group's position is relatively weak, also impacted
the development negatively. In Europe 29 the
Group's combined market share amounted to
25.7% (26.3) in heavy-duty trucks.
The construction equipment market continued
to grow during the first half of 2012, however with
a gradually weakening growth rate. During the
second half of the year demand weakened signifi-
cantly. Measured in number of units, the total
market decreased by 4%. The European market
for construction equipment is expected to decline
by 5–15% during 2013.
Also in 2012 the European bus market was
characterized by weak demand, fierce competition
and considerable price pressure in tenders. Volvo
Buses strengthened its market share to 13%.
Demand for marine engines was negatively
impacted by the continued uncertainty regarding
the economic development, not least in the pre-
viously strong boat markets in Southern Europe.
The slower economic activity and the financial
turmoil had a negative impact also on the market
for industrial engines.
New organization for truck business
in Europe
On January 1, 2013, the Volvo Group introduced a
new organization for its sales and marketing of
trucks in Europe, the Middle East and Africa
(EMEA). The reorganization aims to capitalize
more effectively on opportunities for the Group’s
brands and products. At the same time, an optimi-
zation of the dealer and service networks in East-
ern and Central Europe is carried out, with the aim
to considerably increase the service availability,
primarily for Renault Trucks. The number of service
points is expected to increase by 30–40% for
Renault Trucks and by 10% for Volvo.
The new organization is a stage in the imple-
mentation of the new strategy for the Volvo
Group’s truck operation, which is a key compo-
nent of efforts to improve the Volvo Group’s
operating margin by three percentage points.
−By making smarter use of existing networks,
we can capitalize more effectively on our various
brands and products in the truck operation while
improving our service to customers, says Peter
Karlsten, Executive Vice President of Group
Trucks Sales & Marketing EMEA.
Volvo Buses consolidates manufacture
of complete buses in Europe
In October, Volvo Buses announced its plans to
concentrate its European production of com-
plete buses in the company’s main plant in
Wroclaw, Poland. The consolidation is done to
address a structural overcapacity in Europe.
Production at the Volvo Buses plant in Säffle,
Sweden, is planned to end at June 2013.
Volvo Group invests in Russia
The Volvo Group invests SEK 783 M in a new
facility for the production of cabs at the plant in
the Russian city of Kaluga. The facility, which is
expected to become operational in 2014, will
manufacture cabs for the Volvo and Renault
Trucks brands with a total annual capacity of
15,000 cabs.
During 2012, the European market accounted for SEK 112 billion, corresponding to 37%, of
Group net sales. Europe is the historical home market, where the Group has a considerable
industrial structure with a relatively large share of its manufacturing and sizeable exports.
DEVELOPMENT BY CONTINENT
Europe – the largest market
38
The plant in Kaluga, situated about 200 kilo-
meters south of Moscow, was inaugurated in
2009 and currently supplies Russia and sur-
rounding countries with trucks under the Volvo
and Renault Trucks brands. The total annual
capacity of the facility is 15,000 trucks. Volvo
sold 6,973 heavy-duty trucks in Russia and
Renault Trucks sold 1,777 trucks.
New Volvo engine for Euro 6
In July, Volvo presented an engine tailored for
the tough Euro 6 environmental standards.
Nitrogen oxide emissions will drop by 77% and
particulate emissions will be halved. The first
engine is Volvo’s D13 460 hp engine, which
today powers more than one-third of all Volvo
trucks.
New Volvo FH truck
The new generation of Volvo FH was presented
to the public in early September through parallel
launches in some of our most important markets
in Europe. It was also displayed at the automo-
tive fair in Hannover where it got very positive
reviews. The advanced technology of the new
Volvo FH will create a new platform for strength-
ening Volvo's competitiveness. Production will
start during the spring of 2013.
The truck contains ten top news that all will
contribute to increasing customer profitability.
On the next spread you can read more about the
new Volvo FH.
38