Photo by Volvo Construction Equipment

Volvo CE’s Sales Decline in Slower First Quarter

April 17, 2024
Volvo Construction Equipment posted SEK 22,877 million in the first quarter of 2024 compared to SEK 25,109 million in the first quarter of 2023, an 8.9-percent decline.

Volvo Construction Equipment posted SEK 22,877 million in the first quarter of 2024 compared to SEK 25,109 million in the first quarter of 2023, an 8.9-percent decline. The decrease was small in North America, from SEK 6,537 million in Q123 to SEK 6,425 million in the first quarter of 2024, a 1.7-percent dip. In Europe, however, the dropoff was far more precipitous, going from SEK 8,610 million in the year-ago quarter to SEK 7,177 million in the recently concluded frame, a 16.6-percent decline.

The Africa and Oceania regions combined to decline from SEK 2,106 million to SEK 1,589 million, a 24.5-percent plunge. Asia’s dropoff was minimal, from SEK 7,098 million to SEK 6,925 million, a 2.4-percent plunge. The South America region was flat, actually increasing from SEK 758 million to SEK 759 million.

Overall, adjusted for currency movements, net sales of machines have decreased by 9 percent and service revenues by 3 percent. Compared with the first quarter of 2023, a negative brand and market mix was partly offset by price realization and lower material costs.

During the quarter, net order intake increased by 4 percent, largely driven by the China market and the SDLG brand, which is rising after a low order intake in the previous year’s first quarter. Overall, order intake for the Volvo brand decreased in line with market development in Europe and North America. Orders in South America increased from a low level in 2023, driven by signs of a recovery in Brazil.

However, the tougher business climate has not stopped Volvo CE furthering its commitment to the development of sustainability solutions by taking action in several important areas. First, Volvo introduced its first commercial grid-connected excavator, the EWR240 electric material handler (pictured above), to select customers earlier in the year. This was followed by a forward-thinking partnership with Sweden’s largest ski company SkiStar to help develop a roadmap towards fossil free ski resorts. Later in the quarter, Volvo CE announced the trial of an innovative shuttle delivery solution for transporting its machines from Belley, France, together with Volvo Trucks and logistics firm Capelle Transports.

“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, head of Volvo CE. “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.”

For the first quarter, the total machine market was flat or negative across most regions, Volvo said. While in Asia outside China it was on a par with the previous year and South America saw a modest increase, it declined in Europe, North America and China. Europe’s 22-percent drop was driven largely by customer caution in the face of a weakening economic climate and in North America a fall of 6 percent was likely because of a continued deferral of rental fleet replacement, as interest rates and inflation remain high. Market demand in China meanwhile declined by 22% due to low investment levels and an overall slow economic activity.

The better results in South America, an increase of 4 percent, was bolstered by signs of recovery in various industry segments, while Asian markets outside China overall remained flat.