The hottest Volvo Group's monthly operating revenu

Introduction: in the third quarter of 2011, most markets of Volvo Group still had strong demand. Sales rose to 73.3 billion SEK (excluding the impact of exchange rate fluctuations), an increase of 22% over the same period last year, operating income increased to 5.8 billion SEK (operating income was 4.9 billion SEK in the same period last year), operating profit

in the third quarter of 2011, most markets of Volvo Group still had strong demand. Sales rose to 73.3 billion SEK (excluding the impact of exchange rate fluctuations), an increase of 22% over the same period last year, operating income increased to 5.8 billion SEK (operating income was 4.9 billion SEK in the same period last year), and operating profit margin was 7.9% (7.7 in the same period last year). The negative impact of currency exchange rate changes led to an increase of SEK 1.8 billion in operating income. In the seasonally weak period in the third quarter, the operating cash flow in the industrial business sector was SEK 2.2 billion, significantly higher than that in the same period last year

the profitability of the truck business continued to improve

excluding monetary factors, the sales volume of the truck business increased by 22% to SEK 47.7 billion, the operating revenue increased to SEK 3.962 billion (2.7 billion in the same period last year), and the operating profit margin increased to 8.3% (6.6 in the same period last year). The delivery rate is still high, as is the capacity utilization of the industrial system

in the third quarter, the truck market of Volvo Group generally maintained an optimistic trend, and our truck brand expanded its market share in Europe, North America and South America. Our competitive overall solutions, trucks, services and strong dealers have contributed to these successes

we received orders for 60000 trucks and delivered 55000, and the order volume continues to increase. On average, our delivery time is about 10 weeks in Europe and longer in North America. This means that in Europe, we must deliver the orders we have received by the end of this year; In North America, we have to shut down 2 automatically before we can complete the orders we have received at the beginning of 2012

we estimate that the total market size of 29 European countries this year will reach 240000 heavy trucks (the previous forecast was 230,00 – 240000). We have noticed a slight slowdown in demand in the European market recently. The production speed (slightly increased in August) is now slightly higher than the speed of order receiving, which is why we plan to reduce the production speed in the European production system at the beginning of next year. The market demand in northern Europe and Russia continues to maintain a good level, while the market in southern Europe and parts of Eastern Europe has weakened. Due to the uncertain macroeconomic situation, it is difficult to estimate the total market volume in 2012. However, under the continuous demand for truck renewal, we currently estimate that the size of the heavy truck market in 29 European countries will shrink slightly in 2012, with a range of about 10%

we reduced our forecast for the North American market this year to about 210000 heavy trucks (previously 230000 – 240000); But we expect demand to increase next year. This year's decline is mainly due to the fact that the time required for industrial production to resume the upward trend exceeded our expectations

the current production mode has improved, and the speed has reached a new high. Our optimistic view of demand in 2012 is mainly based on the fact that compared with the new trucks we launched in 2010 (which significantly reduced fuel consumption), the economic benefits of continuing to use old trucks are not worth the loss. We believe that by 2012, the North American heavy truck market will expand by about 20%. In Japan, the signal of increased demand has also become increasingly clear that new manufacturers, equipment manufacturers, automation manufacturers, and system integrators will change significantly in essence, because reconstruction work began after the earthquake and tsunami earlier this year. It is expected that the market size of this year will reach about 25000 heavy trucks. After several years of abnormal weakness, it is expected that the size of the heavy truck market will expand by about 20% in 2012. I am glad to see that the launch of the new medium-sized truck Condor of Youdi has been very successful so far, and with these new models, our current market share is close to 20%, about 10 percentage points more than our original old medium-sized trucks

in Brazil, we have released a new product Volvo VM, which will help us consolidate our position in this important market. Considering that the new emission regulations will come into effect on January 1st, 2012, we expect the Brazilian market to weaken at the beginning of 2012, but under the background of the continuous positive economic trend of the country, the market will soon recover. We expect the market size to be 120000 heavy trucks this year, and the market size will decline slightly by about 10% in 2012

it is difficult to find problems in the development of the world economy and respond in a timely manner to give us estimates. In the short term, we will pay close attention to demand trends and the liquidity of the financial system. If the situation worsens, we may change our expectations for next year. As 17% of employees sign short-term contracts, we are ready to take measures quickly to adapt to potential changes in demand

successfully launched new construction equipment

after excluding monetary factors, the net sales of construction equipment increased by 27% to 15 billion SEK. The total operating revenue was SEK 1.403 billion, and the operating profit margin was 9.4%. Compared with the same period last year, the negative impact of changes in the currency exchange rate led to a decrease in profits of SEK 400million (mainly due to the impact of the depreciation of the US dollar)

even excluding the Chinese market, the market share of construction equipment continues to expand. We noticed that the demand from China slowed down because the government introduced tightening measures to curb inflation. However, we have maintained the position of market leader in China. Since the outbreak of the financial crisis, the recovery of mature markets has been quite slow, far from reaching the level we consider normal. On this basis, we expect that the demand of most mature markets will continue to grow in 2012, although the growth rate is slow

in this year, Volvo Construction equipment company successfully launched equipment that meets the latest emission standards in Europe and North America. In the hands of many competitors, we took the lead in introducing equipment that met the new regulations, digested the increased costs, maintained our existing market share and, in some cases, gained new shares

for bus companies and Volvo Pentax, the demand in Europe and North America is weak, while the situation in emerging markets is just the opposite. Volvo Pentax's industrial engine business is still ideal, but customers in the marine engine market are cautious. For bus companies, Brazil shows a strong growth trend, partly because customers want to buy buses before the stricter emission regulations come into force at the beginning of next year, and partly because our products are very competitive

new financial objectives and new group structure

at the end of September, the board of directors decided to announce the financial objectives of Volvo Group for 2012, which means that we can compare our competitors with ourselves. The board of directors said that Volvo Group currently has the scale and geographical scope required for long-term success, and the new goal sends a clear signal: we must continue to improve our profitability. The profit target is: compared with competitors, the operating profit margin is the highest or the second highest

Volvo Group has achieved rapid growth in the past decade and has become a global leader in the field of heavy trucks, construction equipment and diesel engines. However, the company will never be satisfied with the status quo. Now is the time to take new measures. On January 1st, 2012, we will fully implement a new group structure, which will make better use of the global potential of products and brands in the truck business. We will set up a new organization based on the four different brand companies (Volvo truck, Renault Truck, Mike truck and Youdi truck) previously established (including different departments, which are respectively responsible for the sales, marketing and brand affairs in each geographical region, and I will directly lead it). Similarly, all product development and procurement, as well as the production of trucks and engines, will be handled by the two new centers. At the same time, auxiliary business departments will be merged into new functional organizations. We are doing this in order to establish a more responsive and efficient organization and focus more on our customers and brands. Our products are gaining market share all over the world. I regard this reorganization as a way to ensure the positive development and improve efficiency of Volvo Group

orovpesen

president and CEO of Volvo Group

October 28, 2011

Shanghai, China

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about Volvo Group

Volvo Group was founded in 1927 and its headquarters are located in Gothenburg, Sweden. The group's business areas include Mack trucks, Renault Trucks, UD trucks, Volvo trucks, Volvo buses, Volvo Construction equipment, Volvo penta, Volvo Aero, and Volvo financial services. At present, Volvo Group is the second largest manufacturer of heavy trucks and large buses in the world and the third largest manufacturer of construction equipment