Volvo Construction Equipment reported sales in the first quarter of 2024 were either negative or flat, depending on the region.
Compared to the strong sales in Q1 2023, the company says market demand is softening, with lower deliveries and order intake in Europe and North America compensated only slightly by stronger performance in Asia.
According to Volvo CE’s Q1 report, net sales dipped by 9% to $2.09 billion (22,877 M SEK) from $2.29 billion (25,109 M SEK) in 2023.
Compared with Q1, 2023, a negative brand and market mix was partly offset by price realization and lower material costs. The company reported that net sales of machines decreased by 9% and service sales by 3% when adjusted for currency movement.
North America and Asia each saw a 2% decline in sales for Q1 2024. The largest decline was in Africa and Oceania with a 25% drop, while European sales dipped by 17%.
Driven by signs of recovery in Brazil, orders increased in South America from a low level in 2023 and overall sales remained stable.
“Maintaining profitability remains a high priority and we have taken great steps to ensure as strong a performance as possible during these tougher times,” said Melker Jernberg, president of Volvo CE.
Despite the apparent tougher climate, Volvo CE continued to advance its efforts in electrification. The company has set its own goal of having 35% of its product line being electric by 2030.
Volvo CE is working with SkiStar to develop a roadmap towards fossil free ski resorts.Volvo CE
Additional projects Volvo CE was involved with included a partnership with SkiStar, Sweden's largest ski company to help advance the idea of fossil-free ski resorts. Also, the company announced the trial of an electric shuttle delivery solution for transporting its machines from Belley, France, together with Volvo Trucks and logistics firm Capelle Transports.
Lastly, at World of Asphalt 2024, the company unveiled its new truck-loading variation of the popular L180H wheel loader, the L180 3-pass rehandler wheel loader.
Overall, Volvo CE stated that deliveries in Q1 were on par with last year, with a lower performance in Europe and North America offset by China.
During the same period, net order intake increased by 4%, largely driven by the China market and the SDLG brand which is rising after the low order intake in the previous year’s first quarter.
According to Volvo CE, the overall order intake for the brand decreased in line with market development in Europe and North America.
A 22% decline in Europe was reportedly driven by customer caution in the face of a weakening economic climate. The company asserted that a similar 6% decline in North America was likely due to a continued deferral of rental fleet replacement as interest rates and inflation remain high.
Volvo CE said Asian markets outside of China remained flat. However, demand in China declined by 22% due to low investment levels and overall slow economic activity.
As with overall sales, the 4% market increase in South America was bolstered by signs of recovery in various industry segments.
“While the industry feels the effects of this market downturn, we are maintaining our momentum to come out stronger – ensuring that we remain flexible in our systems while continuing to deliver on our transformation ambitions,” Jernberg said.
Volvo Construction Equipment
