Volvo North American truck orders up 20%

Swedish equipment manufacturer Volvo Group’s truck orders increased in the fourth quarter and for the full year as the manufacturer continued to emphasize North American market growth despite supply chain constraints exacerbated by the United Auto Workers strike. 

North American net truck sales up 27% YoY 

Volvo Trucks’ North American orders, deliveries and sales grew 27% year over year in 2023, as the manufacturer focused on growing the market, Volvo Group Chief Executive Martin Lundstedt said during the company’s earnings call today. 

In Q4, the truck subsidiary reported: 

• Orders totaled 13,492 units, up 18.9% YoY; 
• Deliveries decreased 3.3% YoY to 13,770 units; and, 
• Net sales were 25.3 billion krona ($2.4 billion), up 2.6% YoY. 

For the full year: 

• Orders grew to 54,714 units, up 19.6% YoY; 
• Deliveries reached 60,782 units, up 7.5% YoY; and 
• Net sales finished at $10.3 billion, up 16.6% YoY. 

Construction equipment deliveries up 25% YoY 

Meanwhile, Volvo Construction Equipment’s North American orders, deliveries and sales rose on a YoY-basis for the fourth quarter and full year, as the company benefited from improving supply chain conditions and sustained demand over the past year, Lundstedt said.  

In Q4, the construction equipment subsidiary reported: 

• Orders were placed for 1,129 units, up 172.7% YoY; 
• Deliveries ticked up 0.2% YoY to 2,140 units; and
• Net sales rose 14.8% YoY in Q4 to $691.5 million. 

For the full year:  

• Orders increased 56.2% YoY to 6,935 units; 
• Deliveries finished at 9,549 units, up 24.6% YoY; 
• Net sales totaled $2.8 billion, up 32.7% YoY. 

STATE OF PLAY:  

Volvo Truck’s growth led to an increase in market share, despite supply chain issues and the United Auto Workers strike, Lundstedt said during the earnings call. 

“In North America, Volvo and Mack have been affected by specific supply chain constraints during the year and partly, of course, by the strike,” he said. “The two brands had a combined market share of 15.2% for the full year.” 

NOTEWORTHY:  

In December, Volvo CE continued its divesting efforts by agreeing to sell the company’s global ABG Paver business to Ammann Group following the July 2020 sale of Blaw-Knox paver business in the United States, Lundstedt said.  

“The [ABG] deal is subject to regulatory approval, which is expected to finalize in the first half of 2024,” he said. “It’s also a part of the journey, together with Arquus, to continue to prune the portfolio and keep focus for the different business areas.” 

On Jan. 15, Volvo CE also announced an option agreement with John Cockrell Defense to sell Arquus, Volvo Group’s defense division, according to a Volvo release. 

MARKET REACTION:

Shares of Volvo [OTC: VLVLY] were trading at $24.14 as of market close Friday, down 0.58% from market open. Volvo has a market capitalization of $49.10 billion

THE BOTTOM LINE:  

Despite losing $95.7 million on the Mack truck strikes, Volvo remains confident in the company’s ability to stabilize and grow the market, Lundstedt said. 

“We are back on track. … We have, in particular for Mack, a very strong order board,” he said. “The priority for us, not only this year but for the coming years, is to increase our long-term ability to have stable volume output in North America.” 

Editor’s note: All amounts have been converted to U.S. dollars. 

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