Market share gains in key segments coupled with good cost control and growing demand in most markets helped Volvo Construction Equipment (Volvo CE) post an especially strong third quarter of 2017. This saw sales up 34 percent, order intake up 45 percent and delivers up 48 percent in the period, as well as a strong improvement in profitability.
Adjusted for currency movements, net sales in the third quarter increased by 34 percent to SEK 15,091 million (11,539). Operating income was also strongly up, jumping 237 percent to SEK 2,024 million, up from 601 million in the corresponding period in 2016. This represented a significant step up in operating margin, to 13.4 percent (5.2 percent). Profitability was positively impacted by higher sales, improved capacity utilisation in the industrial system and again from the sale of Volvo CE’s dealership in Great Britain.
Net order intake in the third quarter increased by 45 percent compared with the same quarter in 2016. This increase was largely driven by higher intake from China, as well as growth in other Asian markets and Russia. Deliveries increased by 48 percent, to 14,431 machines.
Market development
Up to the end of August 2017, the European market was up 15 percent, driven by the growth in the UK, France and Italy. The German market is slightly above last year, while the recovering Russian market is up 101 percent.
North America is 7 percent above last year, due to growth in demand for excavators, both compact and larger general-purpose machines. The South American is 6 percent above last year but remains at very low levels. In Asia (excluding China) the total market is 12 percent above last year, with continued growth in India and Indonesia, helped by a recovering mining sector. The Chinese market is 74 percent above last year, with strong recoveries in both excavators and large wheel loaders.
“This is an especially strong performance. Volvo CE has responded well to the growing demand, with volume increases up 48 percent, while at the same time taking a significant step up in profitability,” said Martin Weissburg, president of Volvo CE. “We also continue to gain market share within our product and market strongholds.”
New excavator for Asian market
With a strong performance in Asia, Volvo CE has also introduced its new 20-t EC200D excavator to the market. The machine has been engineered specifically for general construction work.
Countries across Southeast Asia including Indonesia, Malaysia, Singapore, Thailand, The Philippines and Vietnam, together with India, will be the first in the world to receive the new EC200D excavator, according to Volvo CE. Deliveries of the machine are scheduled to begin in early 2018.
The EC200D offers excellent fuel economy in general construction applications such as road construction, building, landscaping and utility work. It is configured with a 5.7 m boom, 2.9 m arm and 0.8 cu m bucket, while maximum breakout force is 116 kN. The machine is powered by a Tier 3 Volvo D5E engine, which delivers 115 kW of power at 2,000 rpm.
“We expect the EC200D will appeal to large construction companies, as well as owner-operators and contractors,” said A.M. Muralidharan, VP sales support and dealer development at Volvo CE Region APAC. “We’re also expecting strong interest from rental companies. The specifications and design of the EC200D make it a perfect option for the rental industry.”
More detailed information on the new Volvo ECD200D excavator can be found in the Nov/Dec 2017 issue of Southeast Asia Construction. Click here to access the magazine.
