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THAILAND

Volvo Group faces Thai damages writ

Sweden's Volvo Group has been sued by a Thai truck dealer for 10.5 billion baht ($324 million) for allegedly unlawfully terminating two contract, a spokesperson said Wednesday.

Published: 1 April 2010 07:40 CEST

Nissan Diesel Thailand, a dealer of trucks made by Volvo subsidiary UD Trucks, had filed suit in Thailand against Volvo, Pär Aronsson, a spokesman for the Swedish company, told AFP, without providing any further details.

“This is an ongoing case and we can’t comment,” he said.

Volvo’s annual report said that Nissan Diesel Thailand filed suit last November against the company and three of its employees, claiming its actions had led UD Trucks to “unlawfully terminate two agreements” with the dealer.

“Volvo considers that the plaintiff’s claim is of no merit,” the annual report said.

Aronsson said it was “quite common” that agreements with dealers “are terminated after we have made a purchase, in this case after we (in 2007) purchased Nissan Diesel,” which has since changed its name to UD Trucks.

Nissan Diesel Thailand is a wholly owned subsidiary of Singapore-based Tan Chong International.

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VOLVO

Sweden’s Volvo regains strength after pandemic puts brakes on earnings

Swedish truck maker Volvo Group was hit by a sharp drop in earnings due to the coronavirus pandemic, but business rebounded at the end of the year.

Published: 3 February 2021 12:21 CET
Sweden's Volvo regains strength after pandemic puts brakes on earnings
Volvo Group CEO Martin Lundstedt. Photo: Adam Ihse/TT

In 2020, the group saw “dramatic fluctuations in demand” due to the Covid-19 pandemic, chief executive Martin Lundstedt said in a statement.

For 2021, Volvo raised its sales forecasts in its trucks division – its core business – in Europe, North America and Brazil.

However, it said it also expected “production disturbances and increased costs” due to a “strained” supply chain, noting a global shortage of semiconductors across industries.

The truck making sector is particularly sensitive to the global economic situation and is usually hard hit during crises.

In March, as the pandemic took hold around the world, Volvo suspended operations at most of its sites in 18 countries and halted production at Renault Trucks, which it owns, in Belgium and France.

Operations gradually resumed mid-year, but not enough to compensate for the drop in earnings.

With annual sales down 22 percent to 338 billion kronor (33.4 billion euros, $40 billion), the group posted a 46 percent plunge in net profit to 19.3 billion kronor (1.9 billion euros).

Operating margin fell from 11.5 to 8.1 percent.

However, the group did manage to cut costs by 20 percent.

“We have significantly improved our volume and cost flexibility, which were crucial factors behind our earnings resilience in 2020,” the group said.

Volvo's business regained strength in the second half of the year.

“Customer usage of trucks and machines increased when the Covid-19 restrictions were eased during the summer and this development continued during both the third and fourth quarters,” it said.

“Both the transport activity and the construction business are back at levels on par with the prior year in most markets.”

For the fourth quarter alone, the company reported a 38-percent rise in net profit from a year earlier.

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