Euro pre-buy sends Volvo profits rising

STOCKHOLM, Sweden — Volvo AB says net income has rose almost a quarter percent thanks mainly to a heavy truck pre-buy in advance of European Union emission rules that take effect this fall.

The unexpected gain in first-quarter profit rose 23 percent to US$530 million).

Trucking companies are opting for current, cheaper engines before the UE-mandated Euro 4 emission rules require more expensive engines to sold as of Oct. 1. The engines cut nitrogen oxide emissions by half.

Still, Volvo CEO Leif Johansson said the truckmaker is experiencing “good order intake’ for vehicles complying with the Euro 4 rules, and a subsequent requirement called Euro 5.

Thee world’s number two truckmaker is also is expanding in Asia, where truck sales are growing faster than in Europe. In March Volvo said it would buy 13 percent of Japan’s Nissan Diesel Motor. The alliance lets Volvo and Nissan Diesel cooperate on commercial trucks with Dongfeng Motor Co., China’s third-largest assembler, and challenge No. 1 truckmaker DaimlerChrysler AG, which also plans to start making trucks in Beijing this year.

— with files from Bloomberg News