The North American operations of Volvo Group booked 9,756 truck orders in the second quarter and delivered more than 16,200 Mack and Volvo trucks to customers. The latter number pushed the Swedish company’s combined market share for its two brands to 17.6%, a full percentage point higher than a year ago.
Volvo executives—who have invested nearly $500 million in their Pennsylvania and Virginia operations and this spring announced plans to build a heavy-duty truck manufacturing plant in Mexico—last week reported that the company’s revenues in North America rose 3% from the second quarter of 2023 to about $2.67 billion.
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The Q2 order and delivery numbers helped offset much of the year-over-year drops in those metrics the company had seen in the first three months of this year. CEO Martin Lundstedt said the global truck market continues to normalize from its post-pandemic turbulence, but he and his team have left in place their 2024 heavy-duty market forecast of 290,000 units, which would be down about 12% from last year. For Europe, however, the Volvo team has trimmed its outlook to 280,000 from 290,000, which implies a 20% drop from 2023.
“We have a correction in the market, and we are following that smoothly. We are adjusting accordingly,” Lundstedt told analysts on a July 19 conference call. “We are showing that we have flexibility in the system […] The reality is that the job needs to be done, and the job has been done in a fantastic way by our colleagues but also by business partners.”
See also: Volvo Group to increase North American heavy truck production capacity
Globally, Volvo Group booked an operating profit of about $1.25 billion on revenues of nearly $8.9 billion. Those numbers were up 50% and 1%, respectively, from prior-year levels. Total truck deliveries during the quarter slipped 8% to about 58,900 vehicles.
Asked about possible U.S. production cuts to match high inventories and slipping demand, Lundstedt told analysts his team hasn’t had to make a major decision yet but will be prepared to move swiftly if needed—as it has done in Europe. He also pointed to the delicate balance between demand now and next year versus closer to 2027, when new Environmental Protection Agency emissions regulations will come into effect.
“I don’t think we can answer that generically because it depends very much on the segments we talk about,” Lundstedt said. “We need to be cautious and make sure that we are following the market.”
There are a few questions about demand for several of Mack’s products, however. Lundstedt noted that the brand’s backlog remains “prolonged” in large part because of its exposure to the growing construction, infrastructure, and energy sectors. He added that work to recover from a strike at Mack’s operations last fall also means backlogs remain sizable.
The Stockholm-listed A-Class shares of Volvo (Ticker: VOLV) closed July 22 trading around $27.30 after climbing nearly 2% on the day. They have climbed more than 15% over the past six months.
