AB Volvo, the Swedish-based engineering and heavy-duty truck-making group, has reported a sharp deterioration in its financial results in the fourth quarter and for the 2001 full year. However, the results were considered to be rather better than expected and the group’s share price perked up today.

Group operating income in the fourth quarter, excluding restructuring costs, was SEK 773 M (versus SEK 1,670 income in the previous year). The net loss in the fourth quarter was SEK 587 (against net income of SEK 1,187 in the previous year).

In the 2001 full year, losses totalled SEK 1,467 (against net income of SEK 4,709 in 2000).

Trucks now account for about 70% of AB Volvo’s business.

Volvo Trucks reported a sharp decline in truck deliveries through 2001. Volvo Global Truck deliveries for the January-December period amounted to 155,311 units – a decrease of 17% compared to full year 2000. In Europe, total deliveries reached 98,041 units, a decrease of 9%; Western Europe declined by 10% to 90,460 units. Deliveries to Eastern Europe increased, however, by 8% to 7,581 units.

The new Volvo Trucks product ranges are being unveiled at the RAI European Road Transport Show 2002 in Amsterdam this week. The FM and FH ranges are at the heart of Volvo Trucks product offering and the model changeover is hugely important to the company.

The company said that a market decline ‘seems likely in Europe during 2002, but we expect that the total market will remain at a relatively favourable level’.

In North America, deliveries amounted to 34,645, a decrease of 40% compared with the corresponding period in year 2000. Deliveries in South America amounted to 5,789 trucks, an increase of 13% compared with 2000. Deliveries to the Asian markets were strong during quarter 4 and a total number of 6,603 trucks were delivered in 2001. The order intake for the truck operations decreased with 12%. Orders declined with 4% in Europe and 35% in North America compared with year 2000.

The company said that order bookings ‘show that we cannot expect any rapid improvements in North America with respect to trucks. Repurchases and the large inventories of used trucks will continue to put pressure on the market in 2002’.

The acquisition of Renault V.I. and Mack Trucks in 2001 was described as ‘an important milestone in the development of the Volvo Group’. The truck companies’ joint organisation for purchasing, product planning and product development, Volvo 3P is now a separate business unit similar to Volvo Powertrain.

Volvo Buses results were seen as poor. The company said in a statement that weak sales were accelerated by unexpected events, including the adverse impact of September 11 on travel patterns, with tourism hit and a negative effect on coach markets in Europe and North America.