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Volvo Q1 Profits Rise Due to Increased Truck Demand

Volvo AB, the world’s second largest builder of commercial vehicles, has just reported that its first-quarter profit has risen due to increased demand from Europe and North America. The company’s net income has more than doubled to SEK4.09 billion ($670 million), from the SEK1.68 billion ($276 million) reported in the same period of last year.

At the same time, the Gothenburg, Sweden-based company said that revenue rose 22 percent Volvo today raised its industry forecast for heavy truck sales in North America and Europe to a range of 230,000 to 240,000 vehicles in both regions. The previous figure was for deliveries of 220,000 units in each area. Volvo’s truck orders advanced 40 percent in the first quarter of the year to 61,292 vehicles.

“Volvo delivered a strong set of numbers,”
said Morten Imsgard, an analyst at Sydbank A/S in Aabenraa, Denmark, according to Bloomberg. “Volvo has a strong discipline keeping the costs down while sales go up.”

Heavy truck deliveries are increasing in the United States and Europe, as retailers and industrial suppliers ship more goods, indicating economic recovery is on the way. Volvo, the maker of Mack trucks in North America and Renault trucks in Europe, announced last month it was recalling 700 workers at its plant in New River Valley, Virginia, in order to boost production.

The truck division’s first-quarter sales rose 25 percent, led by the gains in North America and Europe and the unit’s earnings before interest and taxes almost tripled.

“Our mature markets are recovering,”
Chief Executive Officer Leif Johansson said in the statement. “Demand for trucks continued to improve across the board.”
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About the author: Mihnea Radu
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Mihnea's favorite cars have already been built, the so-called modern classics from the '80s and '90s. He also loves local car culture from all over the world, so don't be surprised to see him getting excited about weird Japanese imports, low-rider VWs out of Germany, replicas from Russia or LS swaps down in Florida.
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