Sweden’s Volvo Group reported record fourth-quarter truck deliveries of 62,800 trucks but said ongoing supply chain issues and higher energy costs forced it to throttle back order intake.
The mixed report countered a generally positive outlook from competitor Paccar Inc., which reported a record market share for its European DAF Trucks unit on Tuesday.
Volvo Group is the parent of Volvo Trucks North America (VTNA) and Mack Trucks. It reported net Q4 sales rose 31% to 134.3 billion Swedish Crowns (SEK) or $13.1 billion. Adjusted operating income was SEK 12.2 billion ($1.2 billion). The overall operating margin was 9.1% compared to 9.8% in the same quarter of 2021.
Volvo supply base under financial pressure
“Costs related to energy, material and supply chain disruptions continue to be high, and we work actively to try to compensate for these effects,” CEO Martin Lundstedt said in a statement. “The situation in the global supply chain is still unstable, characterized by disruptions and unpredictability.”
Volvo’s supply base is under financial pressure. The OEM continued to help keep some suppliers afloat in Q4 because of the ongoing energy crisis in Europe, finance chief Tina Hultkvist said on a conference call, according to Reuters.
“We will continue to have disturbances, shortages and extra costs in the production of trucks and in other parts of the [Volvo] Group,” Lundstedt said.
Across all its businesses — trucks, construction equipment and buses — Volvo Group employment grew to 102,155 from 95,550, an increase of 6,605, as of Dec. 31. That more than offset the layoffs of 4,100 employees in the second half of 2020 during a peak in the COVID-19 pandemic.
Volvo Group truck orders down 21% in Q4
Truck orders declined overall by 21% in Q4 to 54,100. In North America, orders decreased 32% to 11,347 from 16,624 in the October-December period of 2021. Year-over-year North American orders fell 33%. VTNA orders were down 13%. Mack orders dropped 61%.
Overall robust deliveries led to a net sales gain of 30% to SEK 87.3 billion. North America sales rose 27%. VTNA deliveries were flat compared with a year ago. Mack deliveries rose 7%. Combined North America deliveries decreased by 2% to 14,242 vehicles.
VTNA’s heavy-duty truck market share through December increased to 10.0% from 9.6% a year ago. Mack Trucks’ share decreased to 6.2% from 7.7%.
Volvo Group among leaders in transition to battery-electric trucks
Volvo continued to be among industry leaders in battery-electric trucks and construction equipment, posting orders for 2,073 units, a 120% year-over-year increase. Deliveries of battery-electric vehicles in Q4 rose 266%.
VTNA took in 621 orders for its Class 8 VNR Electric daycab compared to 208 bookings a year earlier. It delivered 322 units in contrast to 54 a year ago. Mack received a dozen orders for its LR Electric refuse hauler as opposed to two a year ago. It delivered two trucks versus one a year ago.
“Although volumes are still small, it is encouraging that customers are joining forces with the Volvo Group to decarbonize their value chains,” Lundstedt said.
In November, the Volvo Group and Pilot Co. signed a letter of intent to develop a public, high-speed charging infrastructure for medium- and heavy-duty electric vehicles.
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