 Volvo is having to produce a range of new engines |
Truck-maker Volvo has reported an unexpected 11% drop in profits after it was hit by the cost of meeting forthcoming new emissions guidelines. During its fourth quarter the Swedish giant made pre-tax profits of 4.14bn Swedish kronor ($538m; �303m), down from 4.6bn kronor a year earlier.
The dip was caused by one-off costs of 500m kronor, led by having to produce a new line of cleaner engines.
Volvo's turnover rose to 65.3bn kronor, up from 57bn kronor a year before.
'Increased costs'
The stricter truck emission rules come into force in Europe in eight months time, and in North America at the end of the year.
Volvo said it was also hit by increased sales and administration costs.
"The group is in an intensive phase with product renewal and industrial realignment, which will continue for a little more than a year," it said.
"Naturally, these major changes result in increased costs in the entire industrial system during a period in which we are using old and new production systems in parallel."
Volvo is now sticking to its European sales targets for 2006, but expects sales to be slightly higher in North America.
One-Minute World News 
News services
E-mail this to a friend 
Printable version 