The automaker Volvo reported better than expected results in the second quarter in which operating profit jumped 2.5 percent, while cutting production in order to reduce costs helped the company to offset the slowdown in market sales of heavy trucks in the US. Volvo and German rivals Daimler and Volkswagen were supported by growing demand in Europe in the past year compared with weaker demand in the US and Brazil. The company, which is the largest truck manufacturer in Europe, has revised down its forecast for the North American market, predicting sales in the sector of trucks can amount to 240 thousand. Vehicles to forecast by 250,000 in April.
Operating income in the Swedish concern increased to 6.13 billion SEK (716.18 million USD) against 5.98 billion SEK a year earlier. The results surpassed the expectations of analysts polled by Reuters, who had forecast revenue of 5.64 billion SEK. Volvo, which sells trucks under brands such as Mack, Renault and UD, said truck orders fell by 8% in the second quarter, while expectations were for a decline of 1%.
At the same time slowing demand in the US, Middle East, and recession in Brazil completely confused expectations of the producer of the year. Daimler cut its forecast in May, saying that profits would be “significantly lower”. For its part, Volvo, which owns Mack Trucks brand in the US, announced production cuts in North America and Brazil in February.
Volvo is already working on a restructuring program to reduce annual costs this year by 10 billion SEK compared to the levels of 2012.