Volvo Construction Equipment boosted sales 15.3 percent in the second quarter, posting SEK 19.7 billion (about U.S. $2.83 billion), compared to SEK 17.2 billion in the second quarter of 2011. Operating income leapt 35 percent to SEK 2.7 billion (about U.S. $377 million), compared with SEK 1.95 billion in the year-ago quarter. Operating margin was 13.3 percent, compared with 11.3 percent in the same period a year ago.
Volvo CE also strengthened its market position in wheel loader and excavator sales in China, improving to a 14.7-percent market share, the company said. Overall the Chinese market declined during the quarter, but sales grew in North America and other regions. North America sales were SEK 4.1 billion (about U.S. $581.2 million), compared with SEK 2.14 billion a year ago, an 89-percent jump. Sales increased less than 1 percent in Europe, Asia and South America. Sales increased 62 percent in “other markets,” Volvo said.
“Sales growth continued to be robust during the quarter, most notable in North America where sales were up 89 percent compared to the same period last year,” said Pat Olney, Volvo CE president. “In Asia, we managed to offset a sharp decline in the overall market in China by continuing to gain market share, while demand in Southeast Asia remained strong.”
The remainder of 2012 is uncertain from a volume and pricing point of view. The company expects Europe to be flat, and expects North America to grow 15 to 20 percent, South America 0 to 10 percent and Asia, excluding China, to increase by 0 to 10 percent as well. Volvo expects China to decline 15 to 25 percent.
In the second quarter, Volvo began construction on a large facility in Kaluga, Russia, that will produce six models of excavators for the Russian market. The company also broke ground in May on a $100 million expansion of its Shippensburg, Pa., North American headquarters.