Volvo Group - Condensed report on 2008 operations

After a strong first half of 2008 with registrations of trucks on very high levels in Europe, the truck market has decelerated through the course of the second half of 2008. The total number of registrations in Europe 29 (EU + Norway and Switzerland) decreased by 3% to 318,700 heavy trucks in 2008 (328,905) according to preliminary statistics.

In 2008, the total market for heavy trucks (Class 8) in North America decreased by 11% to 184,938 trucks compared with 207,847 trucks in 2007. The decrease is a consequence of the weak US economy with lower freight volumes and a drop-off in the activity in the construction sector.

In South America demand has weakened in recent months, but was boosted by strong sales earlier in the year. The Brazilian market grew by 35% to 78,632 heavy trucks (57,817) in 2008.

The Chinese market for trucks over 14 tons grew by 11% to 550,126 trucks (494,542) with a sharp decline in registrations during the fourth quarter.

The Japanese market for heavy trucks amounted to 34,898 vehicles (42,717), and saw a decrease of 18%.

The market in India has slowed down significantly and full-year registrations declined by 17% to 159,618 trucks (193,105).

Truck deliveries decreased
The overall delivery pace of Volvo Truck operations declined during the fourth quarter of 2008. In total, 28,035 trucks were delivered during the quarter, which was 12% fewer compared to 31,889 trucks in the same quarter the preceding year.

Deliveries decreased by 28% in Europe and by 31% in North America. The only markets showing increased deliveries are Asia, driven by deliveries to the Middle East, and South America.

Thanks to competitive products and strengthened market channels Volvo Trucks gained market share in several important markets during 2008.

Further adjustments of production levels
To adapt to lower demand globally Volvo Trucks has reduced production rates in the industrial system. As a consequence, approximately 4,000 employees in Europe, the US, Brazil and Australia have been given notice of redundancy. During the fourth quarter a significant number of shutdown days were implemented in the European plants. A cost-reduction plan covering all of Volvo Trucks is also being implemented in order to meet the lower sales levels.

Development and testing of the SCR technology being used by Mack and Volvo Trucks for 2010 emission regulations in North America is in advanced stages, yielding near zero emissions, enhanced engine performance and significant improvements in fuel economy. Reports from both Mack and Volvo customers testing SCR-equipped trucks continue to be very positive.