Volvo Construction Equipment: well positioned for improving market conditions

Volvo Construction Equipment used its international press conference at the Bauma exhibition in Munich to highlight the strides it has made in improving the efficiency of its industrial operations – and its commitment to the introduction of a new generation of customer focused, highly efficient products.

Olof Persson, the company’s president and chief executive, began the press conference by highlighting the tough trading conditions in the industry, which in 2009 saw the total world market for construction equipment within Volvo CE’s product segments decrease by 39% compared to the same period in 2008. Despite the economic situation, the company continued to defend its market share in most markets and product segments, thanks to a strong dealer network and product range. Mr. Persson also noted that the company’s efficiency measures are proving effective. Efforts to shrink dealer inventories were successful, reducing by 47% during 2009 to a point where stock is now in balance with demand. The order book has also stabilized.

“Despite the sharp decline in sales, the impact was lessened due to effective cost reducing measures and improved productivity,” commented Mr. Persson. “Although sales remain at a low level in several regions, it is becoming clear that the state of the global economy is improving. China in particular has strengthened considerably.”

Mr. Persson’s presentation looked to the future as much as to the past. Leveraging growth in Asia will be a key area of development for the company, enabling it to balance its already strong positions in Europe and North America with the increasing opportunities in Asia.

A main thrust of Volvo CE’s efforts will now focus on improving the overall efficiency of its product range. This initiative embraces increasing fuel efficiency, through new engine technology, hybrid technology, tailored engine/hydraulic/driveline design and improved operator training. “These measures will see considerable improvements in customer productivity and profitability,” said Mr. Persson. “We are also now ready to launch – after over 100,000 hours of testing – our response to the Tier 4i/Stage IIIB engine legislation. We are confident that we can offer market-leading performance and economy of operation in terms of power capacity, engine response and fuel efficiency.”

The fitment of Volvo CE’s CareTrack remote monitoring system on all general purpose equipment would also see significant improvements in productivity and machine uptime, Mr. Persson concluded.