‘Weak markets’ hurt Volvo Penta in Q3
A weak marine market worldwide pulled sales down for Volvo Penta by 17 percent in the third quarter and by 11 percent for the first nine months of the near, the Swedish manufacturer said in its quarterly report released last week.
President and CEO of the Volvo Group Olof Persson said in the report that Volvo Penta managed to achieve an operating margin of 8.5 percent in the quarter, 9 percent through the end of September, despite the sharp sales decline. The positive margins were still down 2 percent compared to last year. Persson attributed the positive results to lower costs, which offset the business area's lower volumes.
Boat sales in America were stable and increasing for Volvo Penta, up 5 percent in the third quarter and 10 percent in the first half, but were tempered by the continued economic uncertainty in Europe. Concern about the Euro pulled the downward global sales slump from the first two quarters into the second half of the year.
Volvo will be adjusting production rates down in several areas of the company, as well, to respond to decreased demand and increasing inventories.