Volvo’s growth outpaces bottom (and assembly) line
STOCKHOLM, SWEDEN — The good news is people are buying lots of new trucks.
The bad news, at least for one OEM, is that rapid growth means they’ve had to scramble for parts and people to meet production goals, so much so that it’s cutting into profits.
That’s the word from Volvo Trucks HQ in Sweden.
In its fourth-quarter presentation to shareholders, Volvo said orders for trucks grew 63 percent over the past year and it expects a further expansion this year.
Volvo (which also owns Mack trucks for North America) raised its forecast for 2011 in Europe and North America to about 220,000 units from 200,000.
According to a report from the Reuters news service, Volvo’s CEO Leif Johansson said the world’s number-two truck maker is hiring but new employees “can’t really hit the ground running.”
Sub-contractor problems, increased prices on raw materials such as metals and plastics, and a shortage of skilled staff are hindering efficient and rapid growth, but Johansson predicted an improvement over the next two quarters.
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