Volvo Construction Equipment’s revenue declined 9 percent in the second quarter as growth in North America and Europe was unable to compensate for a sharp drop in demand in China. Revenue in North America hiked 25.2 percent, from SEK 2.349 billion a year ago to SEK 2.943 billion (about U.S. $430.4 million) in this year’s second quarter. European sales increased to SEK 5.144 billion (about U.S. $752.2 million), compared to SEK 4.617 billion a year ago, an 11.4-percent jump.
However, sales in Asia dropped 30.6 percent from SEK 7.009 billion last year to SEK 4.861 billion this year.
Overall, net sales dropped from SEK 16.019 billion in last year’s second quarter to SEK 14.624 billion this year (about U.S. $2.14 billion.)
“The second quarter was characterized by a considerable decline in China – the world’s largest market for construction equipment – which meant we had to adapt our operations to a lower level,” said Martin Weissburg, president of Volvo Construction Equipment. “The decline was rapid and accelerated during the quarter, but we reacted quickly to ensure that production and inventory levels are soon balanced with demand.
“The situation is brighter in our more mature markets, with demand in Europe and North America continuing to expand during the quarter. We are further strengthening our positions in these markets with our new products.”
For the first six months of 2014, revenue decreased from SEK 28.154 billion in 2013 to SEK 27.996 billion in 2014. However, North American revenues jumped 23.3 percent to SEK 5.318 billion (about U.S. $777.8 million).
The previously announced acquisition of theTrucks hauler business was completed during the period, including the main production facility in Motherwell, Scotland, and two product ranges that offer both rigid and articulated haulers. It also includes the distribution of haulers in the United States as well as a 25.2-percent holding in Inner Mongolia North Hauler Joint Stock Co., which manufactures and sells rigid haulers under the Terex brand in China.
During the quarter, Volvo CE also inaugurated a new test and development center in Hapcheon, Korea, and officially inaugurated its new customer center at Volvo CE’s North American headquarters in Shippensburg, Pa.