Swedish manufacturer Volvo’s North American truck and construction equipment orders jumped in the first quarter thanks to strong demand and favorable market conditions in the region.
Volvo Trucks’ North American truck orders totaled 2,596 for Q1, up 151.9% year over year, while the company’s worldwide new truck orders landed at 60,040 in Q1, up 31.7% YoY, according to the company’s earnings release. Volvo delivered 16,011 trucks to North America in Q1, up 15.1% YoY, while worldwide truck deliveries ticked up 10.7% YoY to 61,531.
Volvo’s truck volumes marked a record high for the OEM, despite restrictive book-of-business management, Chief Executive Martin Lundstedt, said during the company’s earnings call.
“When it comes to volume development in the quarter, we had all-time high truck volumes for quarter one,” Lundstedt said. “We continue to be somewhat restrictive in taking orders, and we do that through a gradual opening of the order book to manage cost inflation pressure with stability and longer lead times.”
Meanwhile, Volvo Construction Equipment (Volvo CE) posted 2,596 units of new construction equipment orders in North America, up 107% YoY, while the company’s global equipment orders were 13,342, down 35.5% YoY, according to the company’s earnings release. Volvo CE’s North American equipment deliveries totaled 2,334 units, up 34.5% YoY, while the global construction equipment deliveries totaled 14,468 units, down 30.4% YoY.
Growth in electrification
Volvo took orders for 486 fully electric trucks in Q1, up 140.6% from the previous year, according to the company’s earnings statement. Volvo and its partners Renault Trucks and Mack combined for 825 truck orders, up 67% YoY. Volvo’s worldwide fully electric truck deliveries totaled 350 units in Q1, up 473.8% YoY, while the company combined with its partners to deliver 683 fully electric trucks worldwide, up 253.9% YoY.
As for Volvo CE electrification, compact construction equipment orders that are fully electric totaled 259 units, up 83.7% YoY, according to the company’s earnings release. Fully electric compact construction equipment deliveries totaled 202 units, up 78.8% YoY.
Demand for Volvo’s electric construction equipment is growing, and the company is working to improve its value chains and volume, as well as their partner’s value chains and volumes, he said. “Mack Trucks launched an all-electric medium-duty product range for the North American markets, and this is the next step in the very successful re-entry in the medium-duty segment that Mack did a couple of years ago.”
Volvo and its truck partners are still developing in the electric truck space, including Mack’s expansion into the all-electric medium-duty truck space in North America, Lundstedt said.
Despite the positive performance for Volvo in North America, the company is still navigating supply chain concerns in the region, Jan Ytterberg, chief financial officer for Volvo, said during the company’s earnings call, but demand and currency exchange should bolster North American orders.
“We see [the supply chain strain] especially related to North America, and the cost pressure continues both in the form of inflation but also as we need more resources for the transformation,” Ytterberg said. “As regards to regions, the strong demand in Europe and North America, in combination with the strong U.S. dollar and the euro in comparison to the Swedish krona, contributed substantially.”
Volvo increased its 2023 forecasted registration for Volvo Trucks to 320,000 units, up 6.7% from the previous forecast and 3.3% from 2022’s registrations, according to the company’s earnings release.
Volvo CE’s forecast for 2023 remained flat with a 5% deviation, consistent with the previous forecast, Lundstedt said during the earnings call.