Development by continent – Europe

The largest market

During 2012, the European market accounted for SEK 112 billion, corresponding to 37%, of Group net sales. Europe is the historical home market, where the Group has a considerable industrial structure with a relatively large share of its manufacturing and sizeable exports.

Weak markets
In 2012 the heavy-duty truck market in Europe 28 (EU's 27 member states minus Bulgaria plus Norway and Switzerland) decreased by 9% to 221,000 trucks compared to 242,200 in the preceding year. The markets in Southern Europe weakened further during the year and the weaker market conditions spread to large parts of Europe. Demand held up better in Germany, Scandinavia and the UK. The Russian market was strong for most of the year. In 2013,  the market in Europe 29 is expected to amount to about 230,000 heavy-duty trucks.

The Group’s truck business had somewhat lower market shares during 2012 compared with the previous year. Part of the reason is the weak market development in Southern Europe, where Renault Trucks has a traditionally strong position. A shift in market mix with a relatively stronger demand in Germany, where the Volvo Group's position is relatively weak, also impacted the development negatively. In Europe 29 the Group's combined market share amounted to 25.7% (26.3) in heavy-duty trucks.

Volvo Buses is world leading within hybrid
buses and has sold close to 1,000 hybrid
vehicles in 20 countries. In June, 25 new
hybrid buses were delivered to
Gothenburg, Sweden.

The construction equipment market continued to grow during the first half of 2012, however with a gradually weakening growth rate. During the second half of the year demand weakened significantly. Measured in number of units, the total market decreased by 4%. The European market for construction equipment is expected to decline by 5-15% during 2013.

Also in 2012 the European bus market was characterized by weak demand, fierce competition and considerable price pressure in tenders. Volvo Buses strengthened its market share to 13%.

Demand for marine engines was negatively impacted by the continued uncertainty regarding the economic development, not least in the previously strong boat markets in Southern Europe. The slower economic activity and the financial turmoil had a negative impact also on the market for industrial engines.

New organization for truck business in Europe
On January 1, 2013, the Volvo Group introduced a new organization for its sales and marketing of trucks in Europe, the Middle East and Africa (EMEA). The reorganization aims to capitalize more effectively on opportunities for the Group’s brands and products. At the same time, an optimization of the dealer and service networks in Eastern and Central Europe is carried out, with the aim to considerably increase the service availability, primarily for Renault Trucks. The number of service points is expected to increase by 30-40% for Renault Trucks and by 10% for Volvo.

The new organization is a stage in the implementation of the new strategy for the Volvo Group’s truck operation, which is a key component of efforts to improve the Volvo Group’s operating margin by three percentage points.

- By making smarter use of existing networks, we can capitalize more effectively on our various brands and products in the truck operation while improving our service to customers, says Peter Karlsten, Executive Vice President of Group Trucks Sales & Marketing EMEA.

Volvo Buses consolidates manufacture of complete buses in Europe
In October, Volvo Buses announced its plans to concentrate its European production of complete buses in the company’s main plant in Wroclaw, Poland. The consolidation is done to address a structural overcapacity in Europe. Production at the Volvo Buses plant in Säffle, Sweden, is planned to end at June 2013.

Volvo Group invests SEK

783 M
in cab plant in Russia

Volvo Group invests in Russia
The Volvo Group invests SEK 783 M in a new facility for the production of cabs at the plant in the Russian city of Kaluga. The facility, which is expected to become operational in 2014, will manufacture cabs for the Volvo and Renault Trucks brands with a total annual capacity of 15,000 cabs.

The plant in Kaluga, situated about 200 kilometers south of Moscow, was inaugurated in 2009 and currently supplies Russia and surrounding countries with trucks under the Volvo and Renault Trucks brands. The total annual capacity of the facility is 15,000 trucks. Volvo sold 6,973 heavy-duty trucks in Russia and Renault Trucks sold 1,777 trucks.

New Volvo engine for Euro 6
In July, Volvo presented an engine tailored for the tough Euro 6 environmental standards. Nitrogen oxide emissions will drop by 77% and particulate emissions will be halved. The first engine is Volvo’s D13 460 hp engine, which today powers more than one-third of all Volvo trucks.

New Volvo FH truck
The new generation of Volvo FH was presented to the public in early September through parallel launches in some of our most important markets in Europe. It was also displayed at the automotive fair in Hannover where it got very positive reviews. The advanced technology of the new Volvo FH will create a new platform for strengthening Volvo's competitiveness. Production will start during the spring of 2013.

The truck contains ten top news that all will contribute to increasing customer profitability. On the next spread you can read more about the new Volvo FH.