A stronger European market, stable North American region and increased momentum in the Chinese market helped offset slowdowns in Latin America, the Middle East and Russia during the first three months of the year, with Volvo CE posting largely flat sales in its first quarter 2016 results.
During the first three months of 2016 Volvo Construction Equipment saw net sales dip by 2% to SEK 12,452 M (SEK 12,737 M in Q1 2015). Operating income was also largely flat at SEK 341 M, down marginally compared to SEK 352 M in the first quarter of 2015. Operating margin also held up well, at 2.7%, compared to 2.8% in the same period the year before.
The construction equipment industry continued to decline in a number of major markets in the first quarter 2016, in particular the Middle East and Latin America. The European market is showing positive growth however, up 6% compared to the same period last year, driven mainly by the French market, which jumped 55%. This growth was countered by a cooling UK market and continued slide in Russian demand. The North American market remained stable (-2%) while demand in Latin America dropped sharply (down 40%), especially in Brazil, due to low business confidence and a weak economy. The Chinese market showed increased momentum during the quarter, with demand for excavators and wheel loaders increasing by 8% during the period, compared to last year.
“Thanks to a strong focus on profitable product segments and markets we achieved similar results as in the first quarter of last year,” commented Volvo CE’s president Martin Weissburg. “Our market share continues to increase in the heavy machine segment and the introduction of larger articulated haulers and excavators will generate significant productivity gains for customers and allow Volvo CE to enter new segments.”