Development by continent – South America

Strengthened market position in Brazil

After a very strong growth in 2011, the South American market weakened during 2012, chiefly as an effect of a slowdown in the Brazilian economy. Despite the slowdown the Volvo Group had its second best year to date in terms of truck deliveries.

Volvo strong on a weaker truck market
The South American market for heavy-duty trucks decreased to approximately 146,000 trucks in 2012 compared to 148,000 the year before. Brazil is the largest market by far in South America and accounted for approximately 60% of the total market in the region. In 2012, the Brazilian market decreased by 22% from 111,500 trucks to 87,400, impacted by the general slowdown in the Brazilian economy during the first nine months of 2012 and the transition from Euro 3 emissions regulations to Euro 5. During the fourth quarter demand picked up. Lower financing rates for truck purchases, combined with good customer profitability and the positive outlook for economic recovery in 2013, significantly improved demand. The total Brazilian market for heavy-duty trucks is expected to increase and reach a level of about 105,000 trucks in 2013.

Chile is one of many truck markets in
South America where the Volvo Group
holds a strong position.

The construction equipment market continued to grow during 2012, although the growth rate slowed down during the year. In total, the market increased by 6% in 2012 compared to the strong 2011. Growth in the South American market for construction equipment is expected to be in the range of minus 5% to plus 5% during 2013.

The South American bus market weakened during the year. During 2011, many operators invested in buses with engines adapted to Euro 3 ahead of the changeover to Euro 5 on January 1, 2012, which entailed a price increase on buses. Against that background, investments in buses were fewer during 2012. In Brazil, the market towards the end of the year was also negatively affected by operators awaiting the outcome of municipal elections. The total heavy bus market in Brazil decreased by 9% to 4,400 buses (4,900). With a market share of 25% (23), Volvo is the second largest bus brand in Brazil.

Volvo's market share for heavy-duty trucks in Brazil in 2012.

Increased market shares in heavy-duty trucks in Brazil
Volvo reaped success in the Brazilian market, not least with its new Euro 5 trucks. In the segment for trucks above 16 tons in Brazil, the market share increased to 18.2% compared with 17.1% in 2011 and Volvo strengthened its position as market leader. Volvo has gained market share continuously in recent years. In 2010 the market share was 14.8% and in 2009 it was 13.3%. Within the segment for new Euro 5 trucks, Volvo was the leader with 23.3% of the Brazilian market. The Volvo Group is the market leader in heavy-duty trucks also in Peru with the Volvo brand and in Venezuela with the Mack brand.

During the year, deliveries started of bus
chassis to be used in the third phase of
Bogotá's public transport system,

Volvo Buses leading in Bus Rapid Transit
Volvo Buses is the world’s leading manufacturer of high capacity buses and Bus Rapid Transit (BRT) systems. During the year, deliveries started for the contract of 688 bus chassis to Colombia’s capital Bogotá, which was signed towards the end of 2011. It was Volvo Buses largest contract ever in Colombia. The contract covers conventional buses, articulated buses and bi-articulated buses.

The new vehicles were sold for the third phase expansion of Transmilenio in Bogotá, the continent’s most efficient and advanced BRT-system. With its high capacity and fast transport, BRT is a cost efficient alternative to rail-bound transport systems.

The South American market for construction
equipment is of large importance for
Volvo CE, which has production in
Pederneiras, Brazil.


Volvo CE expands in Brazil
Following a rapid rise in demand for SDLG branded machines in Latin America Volvo CE is investing USD 10 M to start manufacturing SDLG excavators in its Pederneiras, Brazil plant.

In January 2013, Volvo CE also decided to consolidate its production capacity in the Americas by relocating the manufacturing of Volvo branded backhoe loaders from Tultitlan, Mexico to Pederneiras.