Volvo CE Has Big First Half in North America While Sales in China Slump
Volvo Construction Equipment posted a flat second quarter with SEK 25.814 billion (about U.S. $2.52 billion) in sales compared to SEK 25.839 billion in the second quarter last year. Volvo called the results “a solid performance during challenging market conditions.” Volvo CE has maintained a strong position on the market, while taking action to build a more sustainable construction equipment offering going forward.
Deliveries in the second quarter declined 27 percent, primarily because of the market decline in China. Net order intake dropped 42 percent year over year as a result of the drop in China and a natural outcome from the high order intake during the second quarter of 2021.
The downturn in China has been balanced by sales growth in the rest of the world. Sales leaped from SEK 4,418 million in the second quarter of 2021 to SEK 5,669 million in the recently concluded quarter, a 28.3-percent leap. Sales in South America jumped from SEK 857 million in Q221 to SEK 1,890 million this year, a 120.5-percent hike. Sales declined slightly in Europe from SEK 7,734 million a year ago to SEK 7,607 million, a 1.6-percent percent drop. Africa and Oceania, grouped together, increased from SEK 1,408 million to SEK 1,931 million, a 37.1-percent jump.
Big first half in North America For the first six months of the year, worldwide sales dropped from SEK 50,581 million in 2021 to SEK 48,427 million in 2022, a 4.3-percent decline. In North America, sale hiked 19.7 percent, from SEK 8,714 million last year to SEK 10,431 million this year. Sales nearly doubled in South America, from SEK 1,531 million to SEK 2,980 million. In Europe sales were flat, almost identical year over year.
In the second quarter, Volvo CEO demonstrated its commitment to the environment with the handover of a machine constructed entirely from fossil-free steel, and its investment in Limach, a Dutch firm, to expand its electromobility portfolio.
“Thanks to the hard work of our colleagues and supply chain partners, we are enjoying a confident performance with solid sales on a par with last year,” said Melker Jernberg, president of Volvo CE. “With our dedication to expanding our electromobility offering and taking action to place more sustainable construction solutions into the hands of our customers, we not only remain strong in the face of an unpredictable global outlook but are geared for growth.”
Construction activity in most markets has remained on good levels, driven by both the commercial sector and the ongoing investments in infrastructure. While the Chinese market declined because lower economic activity and pricing pressures, Asia outside of China instead saw strong growth in key markets supported by government stimulus and high commodity prices. There is a continued need to renew and expand an aging infrastructure in many countries, with the South American market remaining on a favorable trend with demand for commodities on a high level. While construction activity in both Europe and North America remained high in Q2, total market deliveries were impacted by limited machine availability because of supply chain constraints.
The quarter also marked an important event for Volvo CE with the return of its flagship Volvo Days in Eskilstuna, Sweden, for the first time in four years. Under the banner of ‘Change Starts Here’, more than 7,000 customers visited the company’s headquarters to take a closer look at its line-up of products and services.
