Volvo CE Registers 54% Sales Growth in North America, but China Continues Slowing Down

Volvo CE Registers 54% Sales Growth in North America, but China Continues Slowing Down

Volvo Construction Equipment has achieved a steady rise in sales across both the last quarter and the full year, 2022 – securing good profitability while accelerating in the sustainable industry transformation.

Volvo CE EC230 Electric Excavator

All global markets have enjoyed an increase in machine sales over the last quarter 2022 – with North America seeing the highest rise of 54%, thanks to strong activity in the infrastructure segment. Meanwhile China, which has continued to be impacted by low economic activity last year during the Covid-19 pandemic and ongoing lockdowns, saw an increase in sales and deliveries in Q4 due to the introduction of emission regulations.

In Q4, 2022 net sales increased by 27% to SEK 27,596 M (21,812), with a contribution from both machine sales and the service market. Adjusted for currency movements net sales increased by 13%, of which net sales of machines were up by 15% and service sales remained on a similar level. For the full year 2022, net sales rose 9% amounting to SEK 100,261 M (92,031). Adjusted operating income for the full year totaling SEK 13,244 M (12,228), and corresponding to an adjusted operating margin of 13.2% (13.3).

Global net order intake has continued to remain low with a decline of 23% from Q4, 2021 – although still slightly more orders than the last quarter Q3, 2022 – largely due to restrictive order slotting caused by large order books and long lead times in North America and Europe, as well as stopped sales in Russia. However, deliveries have increased by 4%, again thanks to emission regulations coming into effect in China and the good demand in North America and Asia.

Accelerated Transformation

While maintaining a steady financial performance, Volvo CE has continued to innovate this quarter by introducing powerful new solutions for the here and now and investing into a more sustainable future. The company is continuing to work towards its vision for zero accident worksites with the introduction of automatic braking feature Collision Mitigation System for Volvo wheel loaders.

Volvo CE also announced a large scale investment into its facility in Braås, Sweden. Over the coming years the plant will be adapted to produce a larger range of articulated haulers with different types of powertrains, including electric. These products will join one of the largest ranges of electric machines on the market, including the Volvo electric compact wheel loaders and excavators, and the larger mid-size EC230 Electric excavator.

“We continue to take steps in our transformation journey – continuing to deliver reliable, efficient and more sustainable solutions fit for our customers’ needs today, while driving investment across our business towards our fossil-free future.”

said Melker Jernberg, Head of Volvo CE.

Melker Jernberg, Head of Volvo CE

Market Development

Except for China, activity in the construction industry has remained good across many regions, primarily driven by ongoing infrastructure investments and favorable commodity prices. Underlying demand in the North American market remained solid due to steady infrastructure activity and in South America, the overall market in Q4 was impacted by a slowdown of investments in Brazil. Meanwhile in Europe the market remained relatively steady despite signals of a weakening business climate.

Volvo CE Electric Range

Most Asian markets enjoyed continued high demand for commodities, partially off-set by lower construction activity in key markets such as South Korea and Thailand. And while China was still affected by restrictions and lockdowns caused by the Covid-19 pandemic, it did however see a positive development due to the fact pre-bought electric machine sales were coming into effect from December 1, when emission regulations were introduced.

Volvo Construction Equipment, net sales by market area, in Millions of Swedish Krona (SEK)

Source: Volvo CE