Volvo Reports Q1 Orders in Europe Up 11% image

For the first time in the last six quarters Volvo reported order growth as customers in Europe prepare to replace their old vehicles before tougher emission rules.

Volvo said that during the first quarter sales contracts increased 11% to 61,045 trucks, compared with the same period last year. In Europe, commercial vehicle sales fell for the 14th straight month in February, but Volvo relies on its new version its FH freighter line, introduced last year, as construction and transport companies might replace their old vehicles before stricter environmental regulations which would lead to more expensive models.

“Order intake is clearly improving” and “that’s a positive,” said Mattias Eriksson, a Stockholm-based equity strategist at Nordea, said by phone. “They seem to be doing better in handling the situation than in the severe downturn in 2008-2009.”

Volvo’s EBIT fell 92% to 482 million kronor from last year’s 6.24 billion kronor, the net loss reached 304 million kronor compared with a profit of 4.05 billion kronor in 2012. Sales dropped 23% to 38,416 trucks and revenue fell 25% to 58.3 billion kronor. Volvo said that competition becomes tougher as VW plans to expand in the heavy truck industry through its Scania and MAN units.

Source: Bloomberg