Middle East construction boom to boost Volvo truck sales
Volvo, the world’s second-largest truck maker, says its lorry deliveries in the Middle East are expected to grow 20 per cent this year amid new models and increased government spending on infrastructure that has sparked a construction boom in the region.
The Swedish car maker, known for its attention to passenger safety, earlier this year unveiled a line-up of new lorries at a gala in Abu Dhabi, with which it hopes to boost sales.
And its bold projection comes amid massive government infrastructure spending in the Arabian Gulf and reconstruction efforts in war-shattered Iraq. Governments have been spending billions of dollars on building airports, roads, metros and other big civic engineering projects. That will all increase demand for building and transport equipment such as lorries.
“The ongoing development of the Middle East lorry market makes it a key focus for Volvo Trucks, and we intend to build on this great start to the year to reach our goals,” said Lars-Erik Forsbergh, the president of Volvo Trucks for the Middle East. “The new FH, FM and FMX models will help us to do that, as they offer the highest possible standards of reliability, handling, time-saving features, fuel efficiency, safety and driver comfort to our Middle East customers.”
Volvo last week said first quarter operating profit surged almost five-fold as the manufacturer scaled back production to meet a cost savings target for next year, according to Bloomberg News. Earnings before interest and taxes rose to 2.27 billion kronor (Dh1.27bn) from 482 million kronor a year earlier, Volvo said.
Its chief executive, Olof Persson, has a goal of turning the company into the most profitable heavy lorry maker by reorganising the Volvo and Renault brands’ production in Europe, cutting administrative jobs and expanding overseas.
The programme’s target is 4bn kronor in annual cost savings by the end of next year. A lorry production line and a component plant were closed during the quarter, Bloomberg reported.
Volvo said its lorry deliveries in the Middle East in the first quarter increased 13 per cent in the 13 Middle East markets in which it operates. The car maker launched three models for the Middle East in January, the biggest offering of its kind. The car maker, which unveiled its FH, FM and FMX models at Yas Marina Circuit, said its FMX model was tipped to help the brand dominate the construction segment because it had been built for operating in the toughest working conditions on Earth.
The new range features a redesigned cab with improved seating position, increased usable window area and a fresh rear-view mirror design. Other features include Volvo’s Dynamic Steering, an intelligent I-Shift gearbox and the option of having an air suspension in addition to the traditional mechanical one, it said.
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Published: April 27, 2014 04:00 AM