For Volvo Bus, division of AB Volvo, the third quarter of the current fiscal year, was an unsatisfactory one with deliveries decreasing by 9%, resulting in an operating loss. In Europe the number of buses sold in the quarter was 1,748, compared with  1,629 over the same period of 2006; this plus of 7% over the quarter was set back by a decrease of 3% in sales of the first nine months.

In total 5,402 were sold in Europe against 5,585 in the same period of 2006. All other markets where Volvo Bus is active – North and South America, Asia, Australia – showed a decrease of sales over the quarter and over the first nine months, leading tot a total drop in volume over the third quarter from 3,777 to 3,588 buses and over the first nine months of 12,685 to 11,435 – being a reduction of 10%. 

According to Volvo developments within bus markets remained weak during the third quarter. Markets in the Nordic countries, Central Europe and the UK fell by 10-15%, while markets grew in Southern and Eastern Europe. In the US and Canada the coach market is expected to decrease by 20% during 2007 as a consequence of pre-buys during 2006 and the beginning of 2007. The US city bus market is expected to grow by approximately 10%, however.In Mexico, the coach market remained weak, with a 30% reduction during the first eight months of the year. In the city bus segment, indications point towards a weakening of 5-10% for the calendar year.

In Asia, the overall bus market increased, thanks in part to developments in China and India.During the third quarter, orders received at Volvo Buses amounted to 2,032 buses, compared with 2,374 buses during the preceding year. At the end of the quarter, the order book contained 5,456 buses (5,133 in 2006). A total of 1,983 buses (2,183 in 2006) were delivered during the quarter.Net sales declined 5% in the third quarter to SEK 3,588 M, compared with SEK 3,777 M a year earlier. Adjusted for exchange-rate differences, net sales fell by 3%. The operating loss amounted to SEK 73 M (income SEK 162 M).

Earnings were adversely affected by a reduction in deliveries, continued disruptions in production in Europe relating to the introduction of the new generation of engines for city buses and increased losses in Mexico due to decreased production. The operatingmargin amounted to a negative 2.0% (positive: 4.3).Volvo Buses continues to work with a strong profitability program with focus on Europe and Mexico. In order to address increasing labor costs and raw material price increases, Volvo Buses has launched a global project aiming at reducing product costs.

In Europe, Volvo Buses has developed solutions for the problems associated with the new engine generation. The solutions will be implemented during the fourth quarter.In India, work continues on the construction of a new bus plant in Bangalore, with production start anticipated in early 2008, and in Europe the Volvo 9700 was named the 2008 Bus of the Year.

Net sales by AB Volvo increased by 13% to SEK 68.4 billion (60.5) in the third quarter. Adjusted for changes in exchange rates and acquired and divested units, netsales decreased by 1%. Operating income rose 54% to SEK 5,010 M (3,260)* in the third quarter; income for the period decreased by 20% to SEK 3,149 M (3,939)* in the third quarter.