North America drives Volvo CE sales
By Andy Brown26 January 2023
Volvo Construction Equipment (Volvo CE) has revealed that sales in the fourth quarter of 2022 were up for the OEM in all markets compared to the same quarter last year, with North America seeing the highest increase at 54%.
In the fourth quarter of 2022 net sales increased by 27% to SEK 27,596 M (US$2.7 billion), 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 (US$9.8 billion). Adjusted operating income for the full year totalled SEK 13,244 M (US$1.3 billion), corresponding to an adjusted operating margin of 13.2%.
The very strong growth in North American sales has been attributed to strong activity in the infrastructure segment. China, the world’s largest construction equipment market, saw a rise in sales as, despite the impact of Covid-19 lockdowns, the new National IV emission standard regulations stimulated sales.
Although sales in Q4 increased from Q3, sales in Q4 2022 were down by 23% compared to the same quarter in 2021. Volvo CE says that this is, “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 increased by 4% due to emission regulations coming into effect in China and the good demand in North America and Asia.
Activity in the construction industry has remained good across many regions, primarily driven by ongoing infrastructure investments and favourable 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. In Europe, the market remained relatively steady despite signals of a weakening business climate.
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.
Melker Jernberg, Head of Volvo CE, says, “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.”
Volvo CE has recently introduced an automatic braking feature Collision Mitigation System for its wheeled loaders and a largescale 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.