Volvo, the world’s second largest truck maker, almost quadrupled first-quarter profits, exceeding past expectations thanks to revitalised core markets, and on Friday reaffirmed forecasts for stronger demand.

Rising volumes, combined with strong demand for the group’s new products and the benefits of efficiency enhancements contributed to better earnings in all business areas, chief executive Leif Johansson said, according to Reuters.

Pre-tax profit at 2.88 billion crowns ($US373.9 million) surged past expectations of 2.02 billion, and the 757 million crowns for January-March 2003, the report said.

“Looking at the overall picture for the group, we are now in a reasonably solid upturn with a strong recovery in North America,” Johansson told Reuters, noting that first quarter sales for North America jumped 19% year-on-year to 10.5 billion crowns.

“Based on the strong order bookings for heavy trucks in North America during the past two quarters, we expect a successive recovery on the market and project that it will increase to between 230,000 and 240,000 trucks in 2004.

“In Western Europe we estimate an increase of between five percent and six percent, corresponding to a level of 230,000 heavy trucks,” he said, according to Reuters.

The news agency said that Volvo’s sales, boosted by a pickup in demand for the global truck industry after three years of recession, also comfortably beat consensus, surging 16% to 45.49 billion crowns compared with an expected 43.8 billion.

Overall, group gross margin rose to 20.8% from 19.1% in the fourth quarter, and 18.6% in the first quarter of 2003, the report added.

“The numbers look very strong. The biggest surprises are in trucks, financial services and Aero. All divisions beat our expectations, except for buses,” Adam Jonas, an analyst at investment bank Morgan Stanley, told Reuters, which noted that Volvo is no longer booking costs for its 2001 purchases of France’s Renault VI and MACK in the United States – finally reaping the full cost savings from those acquisitions.

The Volvo group includes the Renault and Mack brands as well as vehicles sold under its own name and has a market share of about 20 percent in North America, the report added.

According to Reuters, the latest Volvo forecast is more in line with that of its biggest competitor DaimlerChrysler, which said in March it expected the North American market to grow to 220,000 units this year, a 23% increase from 2003.