Patrick OLNEY, President & CEO of Volvo Construction Equipment

• How is the European construction equipment market performing?

Back on the uptrend. Volvo CE sales leaped by 57% in the first quarter of 2011 compared with the first quarter of 2010. We had counted on an annual increase of 10 to 20% but are moving into the upper end of this estimate.

• In view of the revival, can you maintain reasonable delivery deadlines?

If the sales increase is in line with our estimate, there won’t be a problem. But if it oversteps that line, then the situation may get tense.

• You are opening factories in China, India and Brazil. Don’t you consider these to be the countries where your company’s future lies?

- The European construction equipment market fell from 130,000 machines per year in 2001 to 100,000 machines in 2010. At the same time, the number of machines in China rose from 50,000 to 400,000, namely twice as much as Europe and North America combined. India and Brazil have also progressed, but not in the same proportions. Today, it is essential for an engineering machinery manufacturer with global reach, such as Volvo, to be present in China.

• By transferring your European production lines over there?

Not at all! By opening factories on the spot specifically for the Chinese market. I don’t believe in relocation, for several reasons. First, our equipment is heavy and transport costs are very high. Second, these markets do not require the same machines: the standards are different and so are their customer demands. Whatever is consumed locally, we have to produce locally – so we manufacture in China for the Chinese and in Europe for the Europeans.

• Do you think that the so-called “highly-regulated countries” go too far in terms of anti-pollution standards?

Regulation itself doesn’t bother me, particularly if it helps to raise the quality of our environment and people’s safety. What is a problem, however, is the harmonisation of standards. It would be a good idea if other countries could join the highly regulated block of countries, and if there could be fewer differences between countries within Europe itself.

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