Strong momentum in most markets underpinned the quarter for Volvo Construction Equipment.
The period also saw the company strengthen its position in wheel loader and excavator sales in China, taking an 11.8% share of this market.
Despite an overall softening of demand in the Chinese market, as a result of government measures to curtail inflation, sales at Volvo CE were positively impacted by strong momentum in most markets.
Net sales in the second quarter amounted to SEK 17,520m (£1.695bn), up from SEK 15,295m in Q2 2010. This represents a 15% jump in demand, and when adjusted for currency movements, this increased further, to 32%. Operating income amounted to SEK 1,893m, down from SEK 2,086m in 2010.
Both sales and operating income were negatively affected as a result of the earthquake and ensuing tsunami that hit Japan earlier this year. Japanese supplier-related issues resulted in lost sales of approximately SEK 1,200m and a reduction in operating income of SEK 300m. This also had a negative impact on operating margin, which at 10.8% was down from 13.6% in the same period in 2010.
Incoming Volvo CE president Pat Olney said: “These are a solid set of figures given the significant currency headwinds we faced and the consequences of the tragic earthquake and tsunami that struck Japan during the period. Due to continued uncertainty in the current macro-economic situation, we are maintaining a high degree of cost flexibility in order to be able to quickly adapt to any potential challenges in market conditions.”