October, 26 2009 - The continued weakness in the world market for construction equipment was reflected in Volvo Construction Equipment’s third quarter 2009 financial results. Net sales declined by 38% to SEK 8,176 M from 13,213 during the period. However, the operating loss of SEK 787 M was considerably below the SEK 1,259 M experienced in the second quarter of 2009. This improvement is the result of efficiency measures being implemented at the company, inventory reductions, and the adjustment of costs to current demand.

Asia leads recovery
Measured in units, the total world market for heavy, compact, and road machinery equipment decreased by 42% in the third quarter of 2009, compared to the same period last year. In Europe, the market was down by 54%, North American market decreased by 50%, and Asia declined by 11%. Other International markets decreased by 61%. The rapid flow of stimulus funding into its construction industry meant that China was one of the few bright spots in the industry during the period, increasing by 45% compared to last year, and helping bolster the situation in Asia. In fact, Asia accounted for over a third of Volvo Construction Equipment’s net sales during Q3 – putting it on a par with Europe.

“Tough market conditions continue in the sector, but there are some positive signs indicating that the decline in demand may have bottomed out and that we are now beginning a gradual recovery,” says Olof Persson, President & CEO of Volvo Construction Equipment. “But we are not relying on a substantial recovery and will therefore continue to improve efficiency and adjust our costs to current demand. I am confident of improving our market position globally, as we are well positioned for the new emission regulations that will soon come into force, with new products and services at the absolute forefront.”