Håkan Karlsson
President & CEO Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007
Units/MSEK 20000 2000 Shanghai Volume 2004 1998 100% of MASA Sales Prévost Units closed Nova BUS or divested 16000 Carrus Vienna 1999 1995 Prévost Irvine 2000 12000 1994 Helsinki 2001 Drögmöller Aabenraa South Africa 2001 1981 Xian Prevost and Nova 8000 50% consolidated 2001 Säffle 1990 1988 Steyr Roswell 2002 1979 Leyland Brazil Aabenraa 2004 4000 Heilbronn 2005
0 1970 1975 1980 1985 1990 1995 2000 2005
Nordic Chassis European Acquisition phase Consolidation Company growth & Complete buses phase
Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007
Volvo Buses consolidation
Complete Bus Strategy Chassis platform One industrial system consolidation
Partner Complete vehicles Chassis Body C NASA Europe International /Shells Builders/ O Converters M P L E Cost efficient modules & components T Marketing, development & E production of complete buses O VdB VBoF Asian hub F 12 6 F Price competitive chassis E Soft Offers R
External Bodybuilders
Aftermarket Volvo Powertrain System integration
Poland Borås/Gbg Säffle Finland Mexico Acrivia Curitiba Prevost Nova Silver Sunwin
KOLA
GPS
CA/SAP
BM/FM
ST
GOS
CATIA V5
MyPlace
Not implemented Partly implemented Implemented
Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007
COACHES INTERCITY BUSES CITY BUSES
Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007
Sales Operating Income MSEK MSEK
16589 16859 633 14035 470 12722 11978 185
-94
-397
2002 2003 2004 2005 2006 2002 2003 2004 2005 2006
No. of invoiced vehicles
10675 10360 9059 7817 8232
2002 2003 2004 2005 2006
Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007 Bus World Market 2006 >12 tons
13,4 % 18,5 % Europe North America Total:24,313 Total: 8,938 Volvo: 3,255 Volvo: 1,655
6,5 % International Total: 65,590 7,8 % Volvo: 4,231 South America Total: 15,273 Volvo: 1,187
NA: excl. School buses NA + SA: Above 15 Tons
Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007
The bus business today
• Global market growth • Urbanisation creates opportunities • Improved profitability – still to weak • Consolidation ongoing • Increased focus on LCC • Environment focus • ”Asian attack”
Bus operator profitability Manufacturer profitability Coach City
Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007
The number of people living in cities will increase
• Roughly half of the world’s population lives in rural areas (> 3 billion) • By the year 2015, 20% of world population will live in 225 cities each > 2 mill people • By the year 2015, 85% of world population will live in cities larger than 50.000 people
Source: United Nations
Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007
Increased tourism travelling
• Tourism is projected to International Tourist Arrivals almost double until the year 2020 • Europe remains dominant but East Asia shows the most dramatic growth • Air transport fastest growing mode of personal transport • Low cost flights are increasingly available
Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007
Environment in focus
• Europe city bus segment Euro4 Euro5 EEV in 12 months • US/Canada city bus market buy 20% hybrid buses • CNG and biodiesel in many markets
We strive towards a leading position
• Fuel efficiency • CNG, biodiesel and DME • Hybrid development • BRT expertis
Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007
Business outlook 2007
• North America and Europe have reach the peak • Region International continue to grow • City bus investments get priority • Environment focus nr 1 priority • Negative currency development • Raw material prices increase
Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007
Business Region Europe
Highlights
• Order intake improving • Deliveries behind last year • Product introductions continues • Strong position in UK, Nordic, Spain • New product range well recieved
Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007
New product range
• New coaches Volvo 9700/9900 • New city bus Volvo 7700 • New Euro 4/Euro 5/EEV diesel engines • New bio gas/natural gas engine • First with safety features - Front impact protection - Front underrun protection - Knee impact protection
Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007
Business region Europe
In focus
• Customer satisfaction
• New product introduction
• Profitability program
• Alternative fuels/drivelines
Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007
Business region North/South America
Highlights
• Good order intake • Good performance Nova, Prevost and South America • Mexico coach market drops significantly • BRT possibilities • New product range
Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007
Bus Rapid Transit – a win-win solution
• Passengers • Government/PTA - Rapid - Environment - Frequent - Reduced congestion - Comfort/Security - Moderate investment
• Operators • Manufacturers - System productivity - Vehicle tailored to - Vehicle adapted to operations demands - International standards - Efficient vehicle use - Concept development
Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007
Business region North/South America
In focus
• Profitable growth
• New product introduction
• Mexico capacity adjustment
•BRT sales
Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007
Business region International
Highlights
• Strong market growth
• Good performance
• Complete bus India
• Chinese competitors export
Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007
Complete bus in India
• Strong brand (1 500 vehicles)
• New body plant 2007
• City bus expansion
• BRT discussions
Volvo Bus Corporation Volvo Investment trip, Wroclaw, May 14-15, 2007
Business region International
In focus
• Profitable growth • New plant in India • Evaluate export from China and India • Nissan Diesel synergies
Volvo Bus Corporation