Volvo, the world's number two big truck manufacturer after Daimler-Chrysler, said on July 25 that new environmental standards in the U.S. had hit sales hard and dragged down profits in the second quarter. Volvo said that its decline on the American market had been caused by the introduction of new environmental standards on January 1, 2007.
Net profit fell by 13.9% on a 12-month comparison to 4.03 billion kronor ($603.92 million) for April to June, but the group said that global demand for trucks was exceptionally strong.
Sales slumped by 36% in North America, but in the Asian region, now Volvo truck's third-biggest market, sales soared by 106% to 10.347 billion kronor.
In Eastern Europe, sales jumped by 60% to 7.1 billion kronor and in the rest of the world by rose by 40% to 4.358 billion kronor.
However, the group reported dynamic overall market demand, saying: "Demand is on record level on most of the world's largest truck markets, with the exception of North America." The Swedish company, which sells products under the brands of Volvo, Renault and Mack, said it expected the North American market to contract by 4% this year. The earnings of the recently acquired companies Nissan Diesel and American group Ingersoll Rand, were integrated into the accounts for the second quarter.
Copyright Agence France-Presse, 2007