Volvo Buses

Diagrams and tables:

Increased market shares in Europe. Strategic establish- ments in Canada and Poland. Good earnings.

Volvo Buses is the second largest manufacturer of heavy buses in the OECD ( 12 tons). The products comprise chassis as well as complete buses, plus mass transit systems for large cities. Priority is given to transport economy, reliability and environmental characteristics.

Volvo Buses has substantial shares of the markets in Europe, Latin America and Southeast Asia. New markets are being cultivated forcefully in order to strengthen Volvo Buses' position globally.

The world market for heavy buses increased slightly in 1995, compared with the preceding year, thereby breaking a 10-year downward trend. The total market in western Europe increased to 17,100 (15,800) units, 8% more than in 1994.

Based on preliminary data, Volvo's share of the western European market for buses weighing more than 12 tons increased from 15.2% to 17.7%.

Volvo's deliveries of buses and bus chassis amounted to 6,830 (5,770) units, an increase of 18% compared with the preceding year. The volume of deliveries was the highest ever for Volvo Buses. Deliveries were higher in most markets, but notably so in the Nordic region, Great Britain and Brazil. The acquisition of Prévost, the Canadian coach manufacturer, increased sales by 330 units. Excluding Prévost, the order backlog at year-end 1995 was 55% higher than on the same date a year earlier.

Sales and income. Volvo Buses' sales in 1995 amounted to SEK 7,695 M (6,136). Excluding acquired units, sales rose 8%. Operating income rose to SEK 405 M (318), of which Prévost contributed SEK 88 M. The operating margin was 5.3% (5.2) and the return on operating capital was 18% (22).

Production and capacity. Volvo produced a total of 6,870 buses, slightly more than 19% higher than the number manufactured in 1994. Utilization of capacity in all plants, Borås in Sweden, Irvine in Scotland, Curitiba in Brazil and Quebec in Canada, was high during the year.

Product development. Volvo Buses' investments in product development resulted in a number of product introductions in 1995. The B12-600 tourist coach introduced during the year, whose body was supplied by Volvo Busse in Germany, was designated "Coach of the Year 1996." The Volvo Environmental Concept Bus, which was unveiled for an international audience in Belgium, demonstrates the development potential of the bus as the future means of transport in densely populated areas. (See pages 24-25.)

Important acquisitions. The restructuring of the bus industry continued in 1995. Volvo Buses played an active role in this process in order to consolidate and strengthen its market position globally.

In June 1995 the company acquired 51% of the Canadian tourist coach manufacturer, Prévost Car Incorporated. The acquisition represented a breakthrough into the North American bus market. Prévost produced nearly 550 buses and had sales of approximately SEK 1,160 M in 1995. The company's share of the North American market for tourist coaches was slightly more than 12 %.

In the beginning of 1996, Volvo Buses and its representative in Israel, Mayers Cars and Trucks, acquired 50% of the shares of Merkavim Metal Works Ltd., a bus producer, from the Israeli industrial group, Koor Industries Ltd.

Joint-venture agreement. Volvo Bus Poland, which is owned jointly by Volvo Buses (55%) and Carrus Oy, a Finnish body builder (45%), was established in June 1995. Initial plans call for the production of approximately 200 low-emission buses for urban and intercity service.

Volvo Buses' largest markets
Registrations of Volvo buses Market share, %
1994 19951994 1995
Great Britain 820 1.380 57.1 60.5
Brazil ¹ 890 1.010 9.4 6.9
Sweden 270 410 53.7 54.8
Singapore 1 270 290 -- --
Peru ¹ 250 280 -- --
United States ²-- 250 -- --

¹ Delivery from plant
² July-December 1995.