Volvo: Truck Markets to Rebound This Year

Swedish truckmaker Volvo AB expects the commercial vehicle market to grow 4% to 230,000 units in Europe and 21% to 105,000 trucks in Brazil this year as the global economy recovers.

Volvo has canceled production cuts previously planned for March and April. The company confirms its outlook that the North American market will be stable at 250,000 units in 2013.

Volvo net profit in the fourth quarter of 2012 plummeted 83% year over year to 793 million kronor (€93 million). Revenue dropped 17% to 71.8 billion kronor (€8.4 billion). Group operating income shrank to 1.6% of sales from 8.0% in the final three months of 2011.

The company's deliveries fell 15% to 58,600 trucks in the October-December period as demand slumped in all major markets. Orders slid 6% in Europe, 21% in North America and 20% in Asia but surged 24% in South America.

Full-year revenue dipped 2% from 2011 to 303.6 billion kronor (€35.5 billion). Operating margin contracted to 5.8% from 8.7% in 2011.

Volvo warns that sales, earnings and margin will remain weak in the January-March period because of the same factors that hurt fourth-quarter sales and income: fewer orders, low capacity utilization and heavy spending to develop new trucks for emerging markets.

The company did not make a full-year forecast.