Volvo Reports 20% Revenue Boost for Q3, Sees Sales Dip in 2024

Supply Chain Constraints Affect North American Market Share
Volvo Electric trucks
Electric trucks outside the Volvo Trucks Tuve plant in Gothenburg, Sweden. (Hollie Adams/Bloomberg)

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Volvo Group on Oct. 18 announced gains in global profit and revenue for the third quarter, but forecast that global truck sales next year will fall compared with 2023 levels.

The Sweden-based company posted a Q3 profit of $1.29 billion, or 63 cents per diluted share, compared with net income of $787 million, 38 cents, in the year-ago period.

Volvo Trucks saw global sales rise 20% to $8.2 billion compared with Q3 2022, while net sales in its North American unit rose 17% year-over-year to $2.489 billion.

Volvo Group’s Q3 net order intake totaled 47,202 vehicles, a decrease of 27% compared with 64,689 units in the year-ago period. In North America, order intake decreased by 7% to 17,355 trucks while deliveries increased by 13% to 15,041 vehicles.

VTNAʼs heavy-duty truck market share in North America through the first nine months of 2023 decreased to 9% from 10.3% in the year-ago period. Sister company Mack Truck’s market share was 6%, compared with 5.9% a year earlier. Volvo Group owns both Mack Trucks and Volvo Trucks.

Volvo Group expects industrywide North American heavy-duty retail truck sales to total 290,000 units in 2024, its initial forecast for the coming year. It expects heavy-duty retails sales this year to reach 330,000 vehicles, unchanged from its previous forecast, it said during its Q3 earnings call with investors.

The company said industrywide heavy-duty truck sales in North America in the first nine months of 2023 totaled 222,918 vehicles, a 16% increase compared with 192,267 in the same period of 2022.

Volvo Group CEO Martin Lundstedt


“We expect our major truck markets to continue to be strong throughout this year as we continue to deliver from our large order books to customers, but forecast lower market levels for next year,” CEO Martin Lundstedt said in the preface to the company’s earnings statement.

During the earnings call, Lundstedt said 2023 had seen “very strong levels” and that for 2024 Volvo is “forecasting a normalization,” although he added that the prognostication is in line with the long-term trend line for regional sales.

“Volvo and Mack have been affected by specific supply chain constraints over the year,” Lundstedt said. The supply chain constraints affected the company’s market share in North America, Lundstedt said, “which was a pity.” The company’s rivals were not affected by the same issues, he said.

The forecast for 2024 in North America is “not a bad market at all,” Chief Financial Officer Mats Backman said during the call. “We should make good money in that market.”

Lundstedt said Volvo had the flexibility to cope with the downturn in sales coming in 2024, noting that the company’s manufacturing plants would benefit from the normalization. He said the record sales of recent months had pushed the company’s system “really hard” and that it came at a price of operational efficiency.

The company needed to reset, he said, having used up all its upside flexibility in terms of “time banks” and part-time contracts to meet demand from customers.

Lundstedt used an analogy of dressing a child in the wintertime in Sweden, saying Volvo must read the demand signals in the coming quarters, be realistic and act accordingly. “It is important to not end up with unnecessary inventory,” he said.

“It is important to read the right signals,” Lundstedt said. However, prices would not decrease, the executives said.

Mats Backman


“We as an industry cannot permit ourselves to decrease prices,” added Backman, citing the impact of inflation, wage rises and the cost of the energy transition. He expects industrywide resiliency in pricing because a normalization of demand is on the way, not because of customer appetites falling off a cliff, said Backman.

Within Volvo, employees and senior management have been focused on making deliveries as demand has ramped up, Backman said, adding that a “whatever it takes” attitude had been prevalent — including absorbing extra costs.

As a result, the demand normalization will allow costs that were propelled by this activity to be reduced. However, increased salaries and the likelihood that supply chain costs would rise is set to put a floor under overall costs, he said.

Globally, Volvo’s operating margin on truck sales rose to 15.6% in Q3 from 9.7% in the year-ago period.

Deutsche Bank analyst Nicolai Kempf said in an Oct. 19 research note that it was “a strong set of Q3 figures that again beat on earnings and provided an encouraging truck market outlook for 2024. Indeed, the company’s market outlook helped lift the entire truck sector.”

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