AB Volvo’s operating margin rose 1.4 points to a record 12.5 per cent in the second quarter and the operating profit of SEK 15.1 billion beat a mean forecast from analysts by 11 per cent.
The truck division increased deliveries by 10 per cent, but new orders declined by 21 per cent on an annual basis in the quarter. In North America, new truck orders fell by 53 per cent.
CEO Martin Lundstedt has told DI that the truck maker has “held back” the order intake on the North American market in order to maintain quality, but there have also been signs of decline in contract and spot prices for freight, which has made customers cautious.
The order intake in Europe, the truck maker’s most important market, fell by 15 per cent in the quarter, a second indication that customers have become more cautious.
The number of electric car models available to consumers in Europe is expected to triple by 2021, according to an analysis by the European Federation for Transport and Environment (T&E), based on data by research firm IHS Markit.
The data shows carmakers will offer 214 electric car models in 2021, up from 60 models at the end of 2018. Forecasts indicate 92 will be fully electric models, 118 plug-in hybrid models and four hydrogen fuel cell models.
The trend will continue, with more than 330 electric car models by 2025. Volkswagen PSA, Toyota and Daimler will be among the major producers.
T&E writes in its analysis that the biggest electric car production plans will be in Western Europe, but Slovakia is forecast to have the highest level of production per capita in 2025.
Some 16 large-scale lithium-ion battery cell plants are confirmed or are due to begin operations in Europe by 2023, one of which is Northland’s plant in Skellefteå.
T&E analyst Lucien Mathieu believes the EU’s car CO2 emissions target of 95g/km by 2025 is a major force behind the new car models and that consumers will see more affordable options. Governments will need to do more, however, helping to roll out electric vehicle charging and changing taxation to make electric cars more attractive.
Swedish engineering group Sandvik announced at the beginning of May plans to separate its speciality steel business, Materials Technology, or SMT, from the rest of the group. Sandvik also said it was considering listing SMT on the Stockholm Stock Exchange.
CEO Björn Rosengren later said he believed Sandvik’s shareholders would benefit if SMT were to be listed, since the division has lagged behind the group’s other units in terms of profitability.
However, not all of Sandvik’s board members are convinced of the benefits of a listing, reports DI this morning. Among others, Fredrik Lundberg, who is a major shareholder in the engineering group via Lundbergföretagen and Industrivärden, is highly sceptical of the plans.
Sceptics argue that there is an industrial logic in retaining the unit and say claims that a spin-off would improve Sandvik’s market capitalisation are exaggerated, since SMT is becoming a smaller part of the group’s main business.
European Commissioner for Agriculture, Paul Hogan, has toned down concerns about the EU-Mercosur trade deal, saying the EU will only import agri-foods that meet the bloc’s regulations. “I hope that our farmers and our ministers, when they have read this more carefully, understand that we have achieved a balanced result,” said Mr Hogan, when EU agriculture ministers were informed about the agreement in Brussels.
Meanwhile, Swedish Rural Affairs Minister Jennie Nilsson said yesterday she did not believe the impact of the deal on Swedish farmers should be exaggerated, although the EU “needs to work on" the quotas for meat, poultry and sugar”.
“If you look at meat specifically, I think that imports from the Mercosur countries today account for about one per cent of sales in Sweden. If we were to take our share of these quotas, it would be one per cent more,” she said.
In a forecast published on Wednesday, the European Commission expressed concerns over Sweden’s growth, saying the country remains vulnerable to trade disruptions.
Sweden’s GDP grew by 0.6 per cent in the first quarter of 2019, which was attributable to strong exports, mainly of services. However, the economy is forecast to slow down from 2.4 per cent in 2018 to 1.7 per cent in 2019. The slowdown will continue in 2020 with an expected GDP growth of 1.5 per cent.
The Commission also said that the outlook is skewed to the downside; declines in household and business confidence and a deceleration in the labour market could lead to a decline in the domestic economy.
Technology giant Amazon has plans to launch to launch thousands of satellites to deliver a space-based internet, while Elon Musk’s SpaceX launched 60 satellites into orbit for its Starlink network in May.
Sweden’s Ericsson is following development closely but has no plans to enter the race. “Launching satellites is not part of Ericsson’s core business,” says the company’s research director, Magnus Frodigh, who describes the technology as a complement, rather than a strong challenger to traditional systems.
The company is instead focusing on harmonisation standards, so that Ericsson's 5G software can be adopted in the technology.
During the first six months of the year, Swedish wind turbines generated just over 10 terawatt hours of electricity, an increase of almost 40 per cent. If the trend continues, the total production of wind power this year will be 20 terawatt hours, more than any previous year, reports Swedenergy.
Meanwhile, although there are reports of a power shortage in some parts of Sweden due to a scarcity of cables and power lines, Swedish electricity exports have hit a new high.
One explanation for the increase in exports is Finland's need for electricity imports, due to the country's greatly delayed expansion of nuclear power. The main buyers of Swedish electricity are Denmark, Finland, Germany, Lithuania and Poland.
During the first half of 2019, Sweden’s net exports of electricity amounted to 13.8 terawatt hours, compared to approximately 10 terawatt hours a year ago.
Companies in the pulp and paper industry will face challenges ahead since packaging, printed paper and pulp prices are expected to continue to fall, while timber prices will remain high, according to a Credit Suisse report.
Unrealistic perceptions about the way in which growing e-commerce will increase packaging demand is one of the reasons, says the financial services company, downgrading Holmen, Stora Enso, UPM and Sappi.
Swedish farmers have expressed concern over the trade agreement struck between the EU and the Mercosur countries – Argentina, Brazil, Paraguay and Uruguay – warning of unfair competition and “dumping”.
Foreign Trade Minister Ann Linde (S) does not see any reason for concern, although she does admit competition will increase. She points out that the deal gives Swedish farmers access to new markets and there will be import quotas on beef and chicken.
The Federation of Swedish Farmers (LRF) is sceptical however, saying farmers will be paying the price for European car makers and pharmaceutical companies to sell their products on better terms to the Mercosur countries.
The trade deal can enter into force in 2021 at the earliest, subject to approval by the European Parliament.
The Nordic region’s six major banks – Danske Bank, DNB, Nordea, SEB, Handelsbanken and Swedbank – announced on Friday that they have formed a company to develop a platform for the management of Know Your Customer (KYC) data. The European Commission has given its approval in accordance with the EU merger control rules.
The banks will pool KYC checks initially for their large and medium-sized Nordic-based companies and begin offering commercial services from next year.
We are a small, but qualified team of graduates in politics, economics, English and classics dedicated to providing quality news digests in English that offer readers a first-hand look at the most important topics covered by the Swedish press. Here you will find a selection of the articles that are published in our Swedish Press Review.