Sweden’s Volvo Group reported record fourth-quarter truck deliveries of 62,800 trucks, but said ongoing supply chain issues and rising energy costs forced it to reduce the amount of orders.
The Volvo Group is the parent company of Volvo Trucks North America (VTNA) and Mack Trucks. It reported that fourth-quarter net sales rose 31% to 134.3 billion Swedish krona (SEK), or $13.1 billion. Adjusted operating income was 12.2 billion Swedish krona ($1.2 billion). Gross operating margin was 9.1% compared to 9.8% in the same quarter of 2021.
“Costs related to energy, materials and supply chains remain high, and we are actively working to try to offset these impacts,” CEO Martin Lundstedt said in a statement. “The situation in the global supply chain remains unstable, characterized by turbulence and unpredictability.”
Volvo’s supply base is under financial pressure. The original equipment manufacturer continued to help keep some suppliers afloat in the fourth quarter due to the ongoing energy crisis in Europe, CFO Tina Hultqvist said on a conference call, according to Reuters.
“We will continue to face disruptions, shortages and additional costs in truck production and in other parts of the (Volvo) group,” Lundstedt said.
Across all its businesses – trucks, construction equipment and buses – Volvo Group employment rose to 102,155 from 95,550, an increase of 6,605, as of December 31. This more than makes up for the layoffs of 4,100 employees in the second half of 2020 during the peak period. In the Covid-19 pandemic.
Volvo Group truck orders fell by 21% in the fourth quarter
Overall truck orders fell 21% in the fourth quarter to 54,100. In North America, orders fell 32% to 11,347 from 16,624 in the October-December period of 2021. Year-over-year orders in North America fell 33%. VTNA orders decreased by 13%. Mac orders decreased by 61%.
Overall strong deliveries led to a 30% increase in net sales to SEK 87.3 billion. North American sales increased by 27%. VTNA shipments were flat compared to last year. Mac shipments rose 7%. Combined deliveries in North America decreased 2% to 14,242 vehicles.
VTNA’s share of the heavy truck market rose in December to 10.0% from 9.6% a year ago. Mack Trucks’ share fell to 6.2% from 7.7%.
The Volvo Group is among the leaders in the shift to battery-electric trucks
Volvo continued to lead the way in the battery-electric trucks and construction equipment segment, with orders for 2,073 units, an increase of 120% year-on-year. Battery electric vehicle deliveries in the fourth quarter rose 266%.
VTNA received 621 orders for the Class 8 VNR electric day cab compared to 208 bookings the previous year. It delivered 322 units compared to 54 units a year ago. Mack has received dozens of orders for LR Electric garbage trucks, up from two orders a year ago. I delivered two trucks for one a year ago.
“Although the volumes are still small, it is encouraging that customers are collaborating with the Volvo Group to decarbonize their value chains,” Lundstedt said.
In November, Volvo Group and Pilot signed a letter of intent to develop public high-speed charging infrastructure for medium- and heavy-duty electric vehicles.
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Click for more FreightWaves articles by Alan Adler.
