Volvo Posts Strong Second Quarter with Sales Jumps in North America and Europe

Volvo posted increased sales of machines and services across all markets for the second quarter of 2023 except South America and Asia resulting in a 12-percent global increase. The increase comes despite net order intake decreasing by 41 percent in global markets, reflecting a weaker market in China, restrictive order slotting in North America and cautiousness among customers and dealers in Europe. Deliveries also decreased by 24 percent, primarily as a consequence of lower demand in China and a slowdown in Brazil.

While sales remain robust in Europe, North America and Africa, there are signs of demand weakening in other markets because of overall economic conditions and rising interest rates, which is cooling down the activity especially with residential construction.

Profitability was strong in the second quarter with a record earnings increase of 12 percent to SEK 28,999 million compared to SEK 25,814 million in the second quarter of 2022. Adjusted for currency movements, net sales increased by 7 percent, of which sales of machines were up by 7 percent and service sales by 4 percent. Compared with the same period last year, a higher operating income of SEK 5,353 million (SEK 3,568 million in Q2, 2022) is largely because of positive brand and product mix and price realization, partially offset by decreased volumes and lower production efficiency as well as higher research and development and selling expenses.

Volvo CE is maintaining solid growth during challenging economic times while continuing investment into a more sustainable future. In the second quarter the company announced the creation of a new compact equipment dedicated business unit to boost growth across the full value chain of its range of compact solutions. It also continued its global rollout of electric compact machines, with launch events in Singapore and Tokyo. 

Melker Jernberg, president of Volvo CE, said: “Our ability to push innovation across construction with solutions for today and tomorrow, while performing well with continued financial growth and improved profitability will ensure we lead the way for years to come. The economic development may be having an effect on the overall construction equipment market, but we are focused on leading a sustainable and profitable transformation for the benefit of our customers, our shareholders and society as a whole.”

In North America, Volvo CE posted SEK 8,123 million in sales in the second quarter, compared to SEK 5,669 million in the second quarter of 2022, a 43.3-percent year-over-year leap, thanks to large infrastructure investments and strong commercial construction. For the first six months of the year, North America sales totaled SEK 14,660 million compared to SEK 10,431 million in the first six months of 2022, a 40,5-percent hike.

In Europe, net sales were SEK 9,413 million in the second quarter, compared to SEK 7,607 million, a 23.7-percent jump. In the first six months of 2023, Volvo’s net sales in Europe were SEK 18,023 million compared to SEK 14,996 million a year ago, a 20.2-percent increase.

In Asia, second quarter sales totaled SEK 8,042 million compared to SEK 8,716 in the second quarter of 2022, a 7.7-percent decline.

Worldwide, Volvo totaled SEK 28,999 million in net sales in Q223, compared to 25,814 SEK million in last year’s second quarter, a 12.3-percent upward clip. For the first six months of the year, total net sales were SEK 54,108 million compared to 48,427 million in the first six months of 2022, an 11.7-percent jump.

While Volvo CE enjoyed strong results this quarter, it expects that cost inflation and increased disturbances in the supply chain will see the industry continue to navigate a challenging economic outlook in the coming months.