VOLVO Construction Equipment increased global sales by 11% in Q1 this year.
The manufacturer said it has secured ‘good profitability’ during the quarter and a boost to operating margin with continued demand in large infrastructure and construction projects – particularly in North America and Europe.
Compared to the same period last year, Volvo is reporting a boost in sales of 17% in Europe and 37% in North America. This is ‘more than compensating’ for a dip in sales in Asia and South America where investment levels have slowed down.
With the exception of China, Volvo said activity in the construction industry has continued to be good across most markets.
Melker Jernberg, president of Volvo CE, said, “Strong profitability and robust sales like the kind we see this quarter is of course important to us and is a testament to the great products and service solutions we continue to bring to the market. But these results also allow us to maintain our industry lead in the sustainable transformation, increasing our investments into zero emission solutions and demonstrating innovative partnerships in what is no doubt the biggest technological shift ever to happen in our industry.”
For Q1, Volvo CE increased net sales by 11% to SEK 25,109 M from SEK 22,613 M in Q1, 2022. Adjusted operating income amounted to SEK 4,587 M (from SEK 2,810 M), corresponding to an adjusted operating margin of 18.3%, up from 12.4% last year.
Demand in major markets outside China was described as ‘stable’, with notable growth in North America, where Volvo said many large infrastructure projects and strong commercial construction more than offset a weakness in residential construction amid high interest rates, and in Europe, where construction activity was positively influenced by rental fleet replacements.
In South America however, investment levels slowed due to lower business confidence among customers in Brazil. Development in Asia remained flat, due in part to the Chinese market reporting a significant negative correction due to the pre-buy effect of emissions regulations and low economic activity.
