AB Volvo (STO: VOLV-B) reported a 3.4 percent decrease in its consolidated sales for 2016 with a total of SEK 301.9 billion (US$35.6 billion) compared to the SEK 312.5 billion (US$36.9 billion) it achieved in 2015. This represented an operating income of SEK 20.8 billion (US$2.5 billion) and a 10.8 percent decrese compared to the SEK 23.3 billion (US$2.7 billion) obtained in 2015.
Sales were mostly affected by a lower demand in North America, South America, Africa and Oceania. AB Volvo saw increase in sales only in Europe and Asia with a 9.4 and 3.9 percent ending in SEK 131.7 billion (US$15.6 billion) and SEK 55.5 billion (US$6.5 billion), respectively. In terms of the company’s divisions, Vehicles saw a 5.7 percent decrease from its SEK 237.4 billion (US$28 billion) standpoint in 2015, while Services and Financial Services raised their numbers by 1.8 and 0.4 percent from SEK 66.2 billion (US$7.8 billion) and SEK 11.2 billion (US$1.2 billion) in 2015.
Within the Vehicles segment, trucks and construction equipment took a hit in 2016 with only buses showing a 8.5 percent increase compared to 2015, reaching a total of SEK 25.4 billion (US$3 billion). Overall, Industrial Operations in AB Volvo including trucks, construction equipment, buses and Volvo Penta represented sales of SEK 291.5 billion (US$34.4 billion) by the end of the year and a 4 percent decrease compared to 2015. Regarding truck sales, Martin Lundstedt issued the following statement “the downward correction in the North American highway segment continued but with some signs of stabilization as the industry’s inventory of new trucks came down to more healthy levels. However, there is still an overhang of used trucks in the market that will continue to dampen demand.”