The Managing Director’s comments

Higher earnings and margin for the Service Business

The Service Business reported its highest ever operational earnings for a third quarter. Demand remained stable in our countries during the quarter, and organic growth in the Service Business was 3 per cent. The margin for the third quarter improved from 10.2 per cent to 12.0 per cent. We maintain a continuous focus on efficiency, availability and the customer experience in our Service Business.

During the year, our efficiency programme, with annual savings of MSEK 150, was implemented, and the savings will have full effect by the end of the year. We continued our work to integrate newly established and recently acquired operations, such as our Volvo truck business, which developed according to plan with improved earnings. By systematically implementing the most effective process es, identified as the Bilia standard, we are gradually improving the efficiency and profitability of our operations. The Service Business accounted for 73 per cent of the Group’s operational earnings for the third quarter and contributes recurring revenue and stable profitability, even in more challenging economic conditions. 

 

Higher order intake for new cars and a larger order backlog

Order intake for new cars increased by 27 per cent, attributable to all markets. Our order intake was positively affected by attractive car models and private leasing offers from our car brands. Demand for electric cars in Sweden and Western Europe developed positively and contributed to the higher order intake. During the quarter, approximately half of the new cars delivered in Sweden and Western Europe were electric. In Norway, virtually all cars delivered continued to be electric. The larger order backlog contributes to future growth in our Service Business. Demand for used cars remained some what weak, but with more stable pricing, particularly for used electric cars in Swe den. Demand was positively affected by higher oil prices, improved range and performance. In Norway, there was intense price competition for new cars, while used car prices were negatively affected by the large supply of cars in the market. We consider our used car inventory to be at a good level in our countries.