Replenished dealer fleets and declining customer demand contributed to a year-over-year decline in Volvo CE’s second-quarter net sales.
Volvo CE reported net sales of roughly $2.3 billion in its second quarter, down from $2.7 billion in its 2023 second quarter, a decline of 15.8%. Service revenue was up 2%, while net sales of machines were down 19%.
While total net order intake was up 9% – led by a year-over-year increase in orders in China and North America – total deliveries of machines were down, which was “caused by lower market demand in Europe and North America,” according to Volvo.
Solid line = Volvo CE book-to-bill ratio; Dotted line = rolling 12 month book-to-bill ratioVolvo Group
Volvo CE’s book-to-bill ratio (orders received to units shipped and billed) for the second quarter was 89%. In North America, the ratio in the second quarter was 74% and 75% on a rolling 12 month basis.
“In North America, book-to-bill is 75% as the market is also softening but from high levels,” said Volvo Group CEO Martin Lundstedt during the earnings call. “Dealer inventories are somewhat elevated, both in Europe and in Latin America and we are having a very close watch on that, obviously. But we are also showing with the flexibility of the tools that we can manage that in a good way.”
North American Segment Down
In North America specifically, net sales in the second quarter of this year totaled $646.5 million, down 14.3% year-over-year. For the first 6 months of the year, North American net sales were down 8.7% to $1.2 billion. The company attributed this lowered demand to both replenished dealer fleets and lower end-user demand.
For the first six months of the year, Volvo CE received orders for 2,852 machines in North America, down from 3,660 in the first 6 months of 2023. In the same time period, Volvo CE delivered 3,645 machines vs. delivering 4,984 in the first half of last year.
Volvo CE maintained its forecast that the North American construction equipment market will see total machine sales down 10% to flat in 2024.
Electric Machine Orders & Deliveries Up
Though total numbers remain a small portion of overall results, Volvo CE reported notable increases in the number of orders and deliveries for fully electric equipment in its second quarter vs. last year’s second quarter.
Total orders in the second quarter were for 537 machines (up 162% year-over-year) and Volvo delivered 569 fully electric machines (up 150%).
Looking at the first 6 months of the year, Volvo CE took orders for 736 fully electric machines (up 59%) and delivered 801 (an 86% increase).
