Volvo Construction Equipment reported net sales down 9 percent in the third quarter compared to 2011, and the value of the order book is down 24 percent for the same period.
Volvo cited a slowing global market and uncertainties about the strength of demand in 2013 for recent moves to slow factory production and reduce dealer inventory. Volvo said earnings were affected by increased price competition and a less favorable geographical and product mix, which saw fewer larger machines sold, particularly to the weakened mining sector.
“The lower economic activity and the uncertainty about the future are impacting customers’ willingness to invest in new equipment,” said Pat Olney, president of Volvo CE. “As a consequence we have reduced production in our facilities and managed to reduce both our own inventories and those at our dealers.”
Volvo outlook: uncertain
Volvo said market conditions for the full year 2012 show few signs of change in the short term. It expects the European market to be down by 0-10 percent (previous estimate: flat), while North America is expected to increase by between 15-25 percent (unchanged forecast). South America meanwhile is still on course to rise by between 0-10 percent and Asia (excluding China) remains expected to rise by between 0-10 percent. Demand in China itself is projected to fall in 2012 by between 25-35 percent, down further from the 15-25 percent previously forecast.
Volvo Net Sales, millions of Swedish Krona (SEK)
|3Q 2012||3Q 2011||YTD 2012||YTD 2011|