Volvo drops into the red

Volvo reports strong sales despite weak market

Swedish heavy vehicles maker Volvo has reported a big loss for the nine months up to September, but doubled sales.

Volvo showed a 980m kronor (£64m, $91.7m) net loss, after exceptional items, compared with a 3.52bn kronor net profit for the same period last year.

Volvo - whose better-known car brand was sold to Ford in 1999 - saw sales rise 50% to 131.9bn kronor in the three quarters, due mainly to the acquisition of Renault's Mack truck unit last year.

The strengthening position comes despite weak demand in its main truck market because of the economic slowdown in Europe and the US.

DaimlerChrysler's commercial vehicles division, Volvo's main rival, posted a 94% fall in third-quarter operating profit but a 6% rise in sales on Tuesday.

Volvo outlook

Volvo did not give a forecast full-year profits but said restructuring to boost profits, including 5,200 job cuts, were on track.

"Our efforts to improve cash flow showed results," chief executive Leif Johansson said in the statement.

"I am convinced that Volvo will have a stronger competitive position and be among the first to benefit when economic conditions improve again," he said.

Volvo's profits were knocked down mainly by a restructuring charge of 1.28bn kronor and a 472m kronor charge owing to a shortfall in pension funds.

Volvo Aero, the company's most successful unit so far this year, will cut at least 400 jobs in the fourth quarter after the downturn in the airline industry following the US attacks.

Volvo Aero manufactures aircraft components and engines and offers support services to airlines.