In 2012, net sales for the Volvo Group’s Industrial Operations decreased by 2% to 296,031 (303,589).
Compared with 2011, sales increased in North America, Eastern Europe and in some smaller markets, however sales decreased in Western Europe, South America and Asia.
In 2012, operating income for the Volvo Group’s Industrial Operations amounted to 16,130 compared to 25,930 in the preceding year. The operating margin for the Industrial Operations amounted to 5.4% (8.5).
The lower profitability was the result of decreased sales, low capacity utilization in the industrial system and restructuring charges during the second half of the year. Income was impacted by restructuring measures amounting to 1,524 mainly refering to Trucks and to Buses. In addition, increased warranty reserves in Trucks amounted to 500. The divestment of Volvo Aero had a positive impact of 568.
In 2012, research and development expenses amounted to 14,794 (13,276). The continued high cost level is a consequence a large number of projects related to the introduction of new products in the next few years.
Selling expenses increased by 6%. Costs associated with the launch of new products increased the expenses.
Impact of exchange rates on operating income
The combined effect of changed exchange rates had a positive effect on operating income of approximately to SEK 1.3 billion in 2012, compared with 2011. This is mainly attributable to that the USD was strong during most of 2012.