Swedish truck maker Scania has described sales of truck demand in the Middle East as “good” as global sales passed $1 billion in the first half of 2011.
The company reported that net income rose 2.4 percent to $383 million as sales climbed 12 percent to $3.6 billion.
Much of the last six months has seen Scania dealing with its speculated merger with MAN trucks, but that hasn’t prevented it from experiencing a 48% increase in truck deliveries increased to 36,568 units during the first half of 2011.
In its Asia division, where the Middle East is grouped, order bookings rose to 7,676 units. The company said these increase were “mainly attributable to Turkey”.
Despite the strong showing, Scania’s executives were left ruing a $158 million negative contribution to its bottom line from unfavourable currency rates against the Swedish Kroner.
This week will see other truck manufacturers reveal their results including sector leader Daimler but it will be MAN that many industry analysts will be looking out for. Particularly with it getting ever closer to Scania. Much of the evaluation of the deal will rely on how close the two companies have performed – and where they have performed well – in the last six months.
Fellow Swedish giant Volvo, which has a far greater exposure in the North American market exceeded analyst forecasts with its own H1 results.
Second-quarter net income gained 62% to $816 million as revenue rose 15% to $12.5 billion.
The company announced greater than estimated increases in the US and Europe with sales up 62% on 2010. Truck orders in the quarter increased 34% to 65,006 vehicles, led by the two regions.
Volvo said that it is on coursed to deliver 230,000 to 240,000 in heavy trucks sales, much of it fleet replacement schemes, this year in North America and Europe.
Like Scania, Volvo said that while it benefited from returning demand in northern Europe, the continent’s southern markets remain fairly stagnant.
“The improvement in earnings comes from higher sales combined with improved efficiency of the industrial system as well as higher gross margins attributable to competitive products,” Chief Executive Officer Leif Johansson said in the statement.
The company was also upbeat on its construction equipment business. The division remains its second-biggest unit and the company said that results are “expected to remain positive” in 2011, with it again expecting gains in North America. However while it is optimistic of growth by a range of 25-35% as the US economy begins to heat up, the company said the Chinese market has “slowed down” due to the government’s effort to limit inflation.
Recent research by ICD Research, suggests that demand for trucks in the Middle East reached 12.7% in 2010 despite the global industry declining by 1.95%.
Spending on transport infrastructure helped Saudi Arabia and UAE lead the way as the Middle East benefitted from favourable business conditions and foreign investment.
