Volvo CE sailing high on the winds of China growth

More opportunities are round the corner, says Volvo CE chief

Sailing in strong winds, rather than in favorable conditions and managing to bring the vessel safely to port, is what makes a true sailor, says Martin Weissburg, president of Volvo Construction Equipment.

The president of the leading construction machinery maker says that combating the high winds requires extraordinary grit, perseverance and skill.

And, these are precisely the qualities that a good CEO also needs, says Weissburg.

His words could not have come at a more opportune time, considering that Volvo has been one of the few bright spots in the machinery making industry, which is reeling from dwindling demand and low product prices.

China's economic slowdown in 2014 has added to the woes for the industry, with growth slowing rapidly for several companies and product prices crashing.

Weissburg, however, wants the companies to take cues from the Volvo Ocean Race sponsored by Volvo Group. "The Ocean Race is a round-the-world race that challenges human physical limits and wisdom, while the economic downturn is something that will showcase real business leaders," he said.

Volvo CE, a subsidiary of Sweden's Volvo Group, will continue investing in its largest single market - China, much like a sailor determined to complete the voyage irrespective of the odds, said Weissburg.

"All the markets experience various business cycles. China is experiencing the downside of the cycle right now, something that is prompting companies to rethink their business strategies," he said.

"When the market recovers, it will be a much more stable business environment and we are confident that we will also be more stronger by then."

Weissburg's optimism comes in stark contrast to dismal performance reported by several global construction machinery makers during the fourth quarter of 2014, largely due to the slowdown in China.

The United States-based Caterpillar Inc, the market leader, reported a 25 percent drop in fourth-quarter profit to $757 million and lowered its expected earnings for the full year due to weak commodity prices.

China's machinery industry expanded 9.4 percent and generated total revenue of 22.2 trillion yuan ($3.57 trillion) in 2014, according to data provided by the China Machinery Industry Federation.

The growth rate was 4.4 percentage points lower than the previous year.

The industry posted aggregate profits of 1.56 trillion yuan for the period, up 10.6 percent, but the gain was 5 percentage points lower than the previous year, mainly because of declining prices and shrinking demand.