Volvo has reported a 6% dip in sales for the final quarter of 2014 and a 1% decline for the full year, attributed to stagnation in Europe and accelerated decline in China.
Operating income decreased in 4Q14, to a loss of SEK155 million, compared to income of SEK272 million in 4Q13. The company’s operating margin was also affected, at negative 6.6% – down from a positive 2.1% in 4Q13. Both income and margin were impacted by low capacity utilisation in the industrial system, as Volvo CE reduced production output to adapt to declining sales volumes and in order to control inventory levels.
Though markets improved in Europe for much of the year, there was a sharp decline in the final quarter, while markets in Asia (with the exception of Japan) and South America were hit by lower demand throughout the year. North America performed counter to the trend, continuing to do well throughout 2014.
“Our work towards further improving operational performance and lowering cost levels has good traction,” commented Martin Weissburg, president of Volvo Construction Equipment. “There is still a lot to do, but we have a good momentum in our activities to improve efficiency and reduce costs.”
Adapted from press release by Katherine Guenioui