Volvo Group profits increase thanks to global vehicle sales
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The Volvo Group reported strong earnings and revenues in the second quarter, as sales in its global vehicle-related segment increased 41% year-over-year.
For the period ending June 30, Volvo, which reports in Swedish kronor, made net profit equivalent to about $ 1 billion, or 50 cents per share. That was up from $ 5 million and a loss of 0.02 cent per share a year earlier, the company reported on July 20.
Revenue increased to $ 10.4 billion from $ 8.4 billion for the 2020 period.
Global vehicle sales, its largest segment, reached 69,122 units versus 48,959, including sales of construction equipment and its Penta engines and excluding sales of UD Trucks, a company that Volvo sold in April.
Mack Truck Photo Gallery
A Mack hymn. (Mack Trucks)
“Overall, freight markets have remained strong and our customers’ use of their trucks high, which has been reflected in strong service activity and continued good order intake,” said Martin Lundstedt. , CEO of Volvo, in the earnings release.
At the same time, the global supply chain for semiconductors and other components, he said, “remains unstable with low visibility. There will be further disruptions and stoppages in truck production and in other parts of the business in the second half of the year. “
In the quarter, North American truck orders increased 85% to 7,740 from 4,176 a year earlier.
Until May, Volvo Trucks North America recorded a 0.6 percentage point increase in market share to 9.7%. Mack Trucks saw its share drop by 0.2 percentage point to 7.1% – both are the American truck brands of the Swedish company from Gothenburg.
Globally, the company has delivered “nearly 46,000 trucks despite disruptions in the supply chain, which has forced us to temporarily halt production of trucks corresponding to almost a month,” Lundstedt said. North American shipments jumped 151% to 9,858 from 3,925 during the 2020 period.
Lundstedt said interest in its electric trucks for urban distribution and garbage collection, mainly in Europe, increased in the quarter, with 98 electric trucks delivered and 194 more ordered.
“The electrification of the transport and infrastructure sectors is a key element in the transition to a more sustainable society, offering us great opportunities,” he said.
Meanwhile, its financial services unit increased its business volume and improved penetration, according to the company.
Operating profit jumped to $ 105 million from $ 1.3 million a year earlier.
The company noted that the improvement in operating income was mainly due to lower credit provisions compared to the period 2020, when credit reserves increased “with higher write-off expectations due to the pandemic. “.
The number of global units financed rose to 67,108 against 60,688 over the 2020 period.
Highlights of the quarter include: the 50-50 Cellcentric joint venture with Germany’s Daimler Truck AG called to manufacture hydrogen fuel cells for trucks in Europe from 2025 and to lobby decision-makers in the ‘European Union to strengthen incentives for climate neutral technologies.
Separately, in a close vote, United Auto Workers at Volvo Trucks North America’s truck assembly plant in Dublin, Va., Ratified a new six-year contract, the two sides said on July 14. . Volvo intends to use this factory to assemble its heavy-duty electric trucks.
Also in July, Volvo, Daimler Truck and Traton Group (the parent company of Navistar Inc. and its international brand of trucks) announced their intention to install and operate a public electric vehicle charging network for long-haul trucks. of all brands and coaches across Europe.
The move aims to launch the necessary infrastructure and boost customer confidence as Europe moves towards climate neutral transport by 2050, truck manufacturers say.
Meanwhile, in the United States – where Class 8 brands of the three European-based truck makers account for about 65% of U.S. retail sales in the heavy-duty segment, according to WardsAuto.com – electric trucks are starting to roll out. of their development phase. cocoons.
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