Volvo promises massive fuel savings on hybrids

Fuel savings of up to 50% are being promised by Volvo as it looks towards its second generation of hybrid machines.

Over a year before its hybrid wheel loader comes to market, the company is planning the next generation and is predicting much wider application of the technology, although it won't be drawn on where it might appear next.

Volvo has enjoyed a record year with turnover close to £4.7bn, but the margin was slightly lower at 7.8% due to high materials prices and fluctuating exchange rates.

Volvo Construction Equipment president and chief executive Tony Helsham said the purchase of Ingersoll Rand's roadbuilding business will provide a buffer against a worldwide slowdown as infrastructure investment in Europe and the emerging economies is strong.

However, he warned that recent expansion in manufacturing capacity, mainly in India, Russia and China, could lead to an over-supply situation if world construction equipment markets falter.

"If overall world growth remains strong, the capacity will be needed," he said, but added that if the booming markets start to slow, the situation will be very bad.

The company calculates that two-thirds of the biggest plant-buying countries are expanding or are at a very high level, while the others are in a slowdown or recession.