STOCKHOLM (Reuters) – sweden’s AB Volvo (VOLVb.ST is increased, the market outlook for North America and Europe on Thursday, as the higher-duty trucks and construction equipment supplies to assist with the above income estimates.
FILE PHOTO: a visit to the heavy equipment of the company at this year’s Bauma China, the International trade fair for construction machinery in Shanghai, China, on November 27, 2018. (REUTERS photo/Aly Song, File/Photo
As the world’s second-largest truckmaker behind Daimler ag (DAIGn.DE) has announced a partnership with Samsung (006400.ME to develop batteries for the electric trucks, the second largest deal in the past few weeks.
The company, which joined forces with Nvidia Corp (NVDA.(O) in the last month, and for the development of ai for self-driving trucks, it is the race with competitors to develop autonomous, and electric vehicles.
As the battle continues, as rising geopolitical tensions and signs of economic slowdown, have ignited concerns that, after several years of strong growth, the demand for trucks to be allowed to go up.
Volvo stated that it now expects truck demand in Europe this year, is flat in comparison with the previous forecast of a decline of 6%, while in North America it would be 5% instead of a flat surface.
However, the order intake for trucks, which it sells under the Volvo, Mack, Renault and UD Trucks brands as it fell for the second consecutive quarter, with a 21% to 47,821 units.
“The higher the truck to guide it in Europe, reflecting a strong start to the year, but it should be noted however, that the company has a less favorable mix compared to the others vis a vis the regions are performing well,” An analyst Class Bergelind said in a note.
Volvo shares, which have gained about a quarter in value this year, were little changed in early trading.
THE ADAPTATION OF THE PRODUCTION
Chief Executive Martin Lundstedt said the company would start the production in order to adapt to the expectations of a market slowdown in the second half of the year. In the past, this has included the decrease of inventories and a cut in the working hours.
The company has also launched a 10 billion-krona cost-effective program that is completed in 2016, which is the shedding of thousands of mostly white-collar jobs, and the spending of companies in the market.
Lundstedt, however, be ruled out for the launch of a new cost-savings program, telling analysts: “in My opinion, it is this kind of a story, etc.).”
Handelsbanken analyst Hampus Engellau said: “The cycle has been slowing down in the next year, and that’s why I think that this is very important … in order to avoid ending up in an underproduction, which has been the achilles heel has traditionally been a Volvo.”
The company has seen strong demand over the past few years, as truck buyers are renewed fleets are starved of investment during the recent crisis, however, this has led to the supply-chain bottlenecks, which are the additional cost and weight to gain.
FILE PHOTO: The logo of Swedish truck maker Volvo, will be shown at the IAA commercial vehicles in Hanover, on the 22nd of September, 2016. (REUTERS photo/Fabian Bimmer/File Photo
The Gothenburg-based, steps have been taken to overcome these problems, and is reported in the second quarter, the operating margin increased to 12.5% from 11.9% a year earlier, staying above the target of 10%.
The operating profit rose to 15.11 billion Swedish crowns ($1.62 billion), from 12.34 billion a year earlier, beating analysts ‘ average forecast of 13.34 billion, according to the Refinitiv.
“These are solid numbers, and Volvo, and we expect (full-year)consensus EPS (earnings per share), up by 2-3%,” Citi’s Bergelind he said.
Reporting by Esha Vaish in Stockholm; Editing by Sherry Jacob-Phillips and Mark Potter