Volvo Group sold and delivered more trucks in the first quarter than in any Q1 in its history. The Swedish truck maker cited pent-up demand to replace aging fleets as a major factor.
“Despite a deteriorating economic outlook with high inflation and rising interest rates, transport volumes and infrastructure activity have continued to be solid in most of our markets,” Martin Lundstedt, Volvo Group president and CEO, said in a letter to shareholders.
“There is a continued pent-up need to replace aging fleets, which is noticeable on the truck side, where order intake rose as we gradually opened the order books for the second half of 2023.”
Volvo is the first of the four major truck manufacturers to report its financial results. Paccar Inc. reports results on Monday.
Volvo sales increase in all business segments
Net sales increased in all business areas — trucks, buses, construction equipment and marine/industrial — to 131.4 billion Swedish crowns (SEK) or $12.74 billion compared to SEK 105.3 billion or $10.23 billion in the January-March period of 2022.
Adjusted operating income improved by SEK 5.7 billion to SEK 18.4 billion. Operating margin was 14% compared to 12% a year ago. Operating income nearly doubled to SEK 17.1 billion from SEK 8.6 billion.
“A good profitability is important for us to be able to continue to increase our investments in the biggest technological shift ever in our industries,” Lundstedt said. “We are in a period when we are investing in battery and fuel cell electric vehicles as well as internal combustion engines in parallel.”
Electric vehicles show significant growth
Volvo continues to promote even single-unit deliveries of battery-electric trucks as it builds a fleet of zero-tailpipe-emissions vehicles. The order intake for fully electric trucks increased by 67% to 825 compared to 494 vehicles. Deliveries increased by 254% to 683 compared to 193.
The company entered a 50-50 joint venture with rival Daimler Truck in 2020 to build hydrogen-powered fuel cell trucks it will sell in the second half of the decade.
In its overall trucking business, Volvo posted sales of SEK 89.55 billion, up 29% from SEK 69.55 a year earlier. In North America, orders rose 152% to 15,159 trucks. Deliveries were up 15% to 16,011 vehicles. Volvo Trucks North America’s market share through March decreased to 8.7% compared to 9.8% a year ago. Mack Trucksʼ market share increased to 5.7% from 5.3%.
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