Photo courtesy of Volvo Construction Equipment
Volvo Construction Equipment (Volvo CE) has reported improved earnings and stable sales in Europe and North America in the fourth quarter of 2023, but says softer industry demand has started to show its influence in other parts of the world.
For the full year 2023, Volvo CE, a Swedish multinational with its North American office in Pennsylvania, achieved an increase in annual net sales compared with the year before, despite a drop in global sales in the fourth quarter.
Heading into this year, Europe, North America, Africa and Oceania are reporting steady-but-softening sales, while Asia and South America are seeing declines tied to slower economic activity.
While its global machine sales are showing signs of softening, service-related sales revenue for Volvo CE has risen recently, which Volvo says demonstrates the increasing relevance of its service offerings.
In the fourth quarter of 2023, Volvo's global net sales dropped by 4 percent compared with the prior year’s final quarter. In a sign of an imbalanced construction economy globally, sales fell by more than 28 percent in Asia year on year while rising by nearly 15 percent in North America and rising by 8.7 percent in Europe.
Volvo says the Asian market decline has been primarily caused by lower demand in China, adding that the increase in orders in North America is largely due to the low order intake from the fourth quarter of 2022 that was driven by unpredictable supply chains.
Volvo CE says it is “well positioned to maintain its influence on the industry transformation," adding it has taken further significant steps to decarbonize construction in 2023 by establishing net zero partnerships with customers such as Ireland-based CRH plc and Germany-based Heidelberg Materials to help them reduce their operational emissions.
The company points to its ongoing rollout of electric-powered construction equipment models as another step tied to decarbonization.
“The progress and milestones we have made in 2023 will prepare us for the challenges of 2024,” Volvo CE President Melker Jernberg says. “There is no doubt our industry is coming into the new year faced with a weaker market landscape, but now more than ever we will show our ability to perform for today while transforming for tomorrow.”
