Product renewal and restructuring
The North American market declined somewhat in the wake of slow economic growth. Demand in Brazil was strong throughout the year while the Japanese market was supported by economic measures by the government. The truck market in India was low, reflecting the slowdown in the economy while the Chinese market picked up somewhat compared to 2012.
Varying market conditions
In 2013, the heavy-duty truck market in Europe 30 (EU plus Norway and Switzerland) increased 8% to 240,200 trucks compared with 221,800 in 2012. For 2014 the total market is expected to be at a level of about 230,000 heavy-duty trucks.
In 2013, the total North American retail market for heavy-duty trucks decreased by 5% to 236,300 vehicles (249,600). For 2014, the total market is expected to reach a level of about 250,000 heavy-duty trucks.
In 2013, the Brazilian market increased by 19% to 103,800 heavy-duty trucks (87,400). For 2014 the total market in Brazil is expected to remain at the level of about 105,000 heavy-duty trucks.
In Japan the total market for heavy-duty trucks rose by 6% to 33,800 vehicles (32,000). For 2014 the total market in Japan is expected to remain at the level of about 35,000 heavy-duty trucks.
In India, the total market for heavy-duty trucks declined by 33% to 131,700 trucks (195,100). The total Indian market for medium-duty trucks declined by 19% to 76,300 trucks (94,200). For 2014 the total market in India is expected to reach a level of about 145,000 heavy-duty trucks and about 88,000 medium-duty trucks.
In China, the total market for heavy-duty trucks reached 774,100 vehicles (636,000). The total market for medium-duty trucks was 286,800 vehicles (290,300). For 2014 the total market in China is expected to reach a level of about 700,000 heavy-duty trucks and about 280,000 medium-duty trucks.
In general the Volvo Group maintained or increased its market positions in the main markets. In Europe the combined market share for heavy-duty trucks amounted to 24.3% (25.7) and in North America it was 18.8% (18.3). In Brazil the market share in heavy-duty trucks increased to 20.0% (18.2) while it increased to 18.7% (17.5) in Japan. In India the market share for Eicher amounted to 30.4% (31.4) in the medium-duty segment and to 4.4% (3.9) in the heavy-duty segment.
Orders and deliveries
In 2013, a total of 200,274 trucks where delivered from the Group's wholly-owned operations, a decrease of 2% compared to 2012. Deliveries decreased in all markets except South America.
Order intake to the Group's wholly-owned operations increased by 12% to 214,301 trucks with increases noted in all markets.
In 2013, net sales in the truck operations decreased by 6% to SEK 178,474 M (189,156). Adjusted for changes in exchange rates, net sales increased by 1%.
Operating income excluding restructuring charges amounted to SEK 6,824 M (12,219), while the operating margin excluding restructuring charges was 3.8% (6.5). Restructuring charges amounted to SEK 679 M (1,440). The lower profitability compared to 2012 is mainly an effect of a negative currency impact of SEK 2,698 M, higher costs for R&D due to reduced capitalization of R&D investments, higher costs in the manufacturing system and selling expenses associated with the changeover to new generations of trucks.
Extensive product renewal
The activity level in the Group’s truck operations was very high during the year. In Europe, Volvo Trucks launched the new Volvo FM, Volvo FMX, Volvo FL and Volvo FE. In June, Renault Trucks presented a new, comprehensive truck program comprising its T, K, C and D series for long-distance haulage, construction and distribution. In addition, the new Euro 6 engines were launched.
The renewal of the Group’s truck program continued with the launch of UD Quester, an all-new series of heavy-duty trucks developed specifically for growth markets in Asia and other areas. In India, VECV, the Group’s joint venture together with Eicher Motors, started manufacturing the new 5 liter and 8 liter engines for UD Quester and the medium-duty truck program in Europe. Towards the end of the year the Eicher Pro Series, a complete new range of 11 trucks and buses, was revealed. In Brazil the new Volvo VM was launched and In North America, new powertrain packages were among the product news.
The new trucks, which shall contribute to the Group’s long-term growth and profitability, were very well received by both dealers and customers. The Group’s new and stronger product programs have also provided dealers with stronger faith in the future and motivation for them to continue to invest and contribute to the development of the Group’s brands.
Restructuring to strengthen competitiveness
On January 1, 2013, the Volvo Group introduced a new organization for its truck dealer networks in Europe, the Middle East and Africa (EMEA). The reorganization aims to capitalize more effectively on opportunities for the Group’s brands and products in line with the new strategy for the truck operation.
In October, there was a directional decision to implement changes in the European truck manufacturing operations in order to increase efficiency and strengthen competitiveness. By optimizing the industrial structure in Europe, the Group will be able to build trucks in a much more efficient way with lower cost per truck.
At the start of 2013 a program aimed at improving the overall efficiency of the Japanese production system was announced. The program involves consolidating manufacturing to the main plant in Ageo and reducing production capacity in both engines and truck assembly. Measures are also ongoing in Japan to lower costs and enhance efficiency in the sales channels within the framework of the REX program (Retail Excellence).