Volvo Construction Equipment experienced a 6% sales dip during the fourth quarter of 2014, compared to the same period of the previous year.
The end-of-year slump contributed to a 1% fall in sales for the year as a whole.
The Swedish equipment manufacturer has cited stagnation in Europe and decline in China as major factors behind lacklustre sales.
“Our work towards further improving operational performance and lowering cost levels has good traction,” commented Martin Weissburg, president of Volvo CE.
“There is still a lot to do but we have a good momentum in our activities to improve efficiency and reduce costs,” he added.
In Q4 2014, the company’s reported net sales fell to $1.485bn, a 6% reduction compared to the $1,573bn achieved during the final quarter of the previous year. Volvo CE’s fourth quarter operating income also fell to $18.75mn, from $32.91mn in Q4 2013.
The firm has stated that both its income and margins were impacted by low capacity utilisation in the industrial system, causing it to reduce production output to adapt to declining sales volumes and control inventory levels.
Volvo CE said that the disappointing figures reflect the challenging market conditions in most regions. An improving European market for much of 2014 – with growth in Germany, the UK, and France – was dampened towards the end of the year by a sharp decline, especially in Rusiia.
With the exception of Japan, all Asian markets were below 2013 levels. The Chinese market was especially affected, denting demand for both Volvo CE’s Volvo- and SDLG-branded products.
The “one bright spot”, according to the manufacturer, was the North American market, which continued to perform well throughout the course of last year.
