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Bloomberg
Volvo AB boosted its forecast for truck markets in the US and Europe this year as low fuel prices and interest rates push demand, a development that’s expected to put more strain on an already tight supply chain. The shares rose the most in three months.
The world’s second-biggest truckmaker raised its expectation for industrywide North American deliveries by 7 percent and the European market by some 3 percent as freight transport expands.
New sales will continue to stretch Volvo’s ability to fill orders, which already raised manufacturing costs last year, the Gothenburg, Sweden-company said.
Volvo has been able to meet “most†customers’ demands on order timings for now, Chief Executive Officer Martin Lundstedt said. Supply bottlenecks will persist through at least the second quarter, he said.
Buoyant truck markets and recovering construction equipment demand are bringing Volvo closer to a goal of lifting operating profit consistently above 10 percent of revenue. Volvo rose as much as 4.5 percent and was trading up 3.3 percent at 165.2 kronor as of 10:38 am in Stockholm.